Unlicensed RE Agent Sentenced for $11M HUD Fraud Scheme

After pleading guilty to charges related to a scheme resulting in losses of more than $3.5 million to HUD, an unlicensed real estate agent and property investor was sentenced to 36 months in federal prison, followed by three years of supervised release, and ordered to pay restitution of $2.83 million. According to the plea agreement, between August 1993 and May 2001, Robert Duran, aided and abetted by others, caused the funding and insuring of approximately $11.45 million in fraudulent FHA-insured home mortgage loans on at least 73 properties in Los Angeles and Riverside counties, California. All the properties went into default and were resold at a loss to HUD of approximately $3.56 million. Duran worked as an unlicensed real estate agent and property investor for real estate and investment companies. As an investor, Duran provided false employment, credit and income documents to mortgage lenders, many of which were FHA-insured lenders. Duran also acted as a real estate agent on sales of property to either straw buyers, fictitious buyers or buyers that did not qualify for an FHA-insured mortgage loan. Duran would also assist investors in facilitating sales of property to non-qualifying buyers or would act as an investor himself. He caused fraudulent employment, income, credit and identification documents to be submitted to FHA and enlisted notaries to falsely notarize that they witnessed the signing of loan documents. Duran also used the notary books of others to falsely notarize loan documents without the knowledge of those notaries and placed downpayments into escrow on behalf of non-qualifying buyers.