Mortgage fraud ringleader pleads guilty; losses may exceed $100M

Ronnie Edward Duke, 45, of Fenton, has pled guilty in connection with an extensive multi-million dollar mortgage fraud conspiracy, because foreclosures lead to vacant homes, which lower property values and serve as havens for criminal activity,'' said United States Attorney Barbara L. McQuade.

The scheme lasted for close to four years, ending in July 2007 when the FBI executed seven search warrants in metropolitan Detroit and Florida. The scheme involved obtaining ''real'' loans and, in many instances, ''ghost'' loans, from mortgage lenders. ''Real'' loans were closed at the offices of a legitimate title company, and the related warranty deeds and mortgages were properly recorded at county registers of deeds.

However, the loan application and other related documents were materially false and fraudulent in a number of ways. The borrower described in the loan application was not the true borrower but merely a straw buyer with an acceptable credit history who was recruited to assume that role for a fee. Any down payments were paid from proceeds of the scheme rather than from the borrower's own personal funds.

Over the four-year period, the scheme involved more than 500 fraudulent mortgage loans, more than 100 straw buyers, and approximately 180 different residential properties in metropolitan Detroit that were used as - or falsely represented to mortgage lenders to be--the collateral for the loans. Most of these loans went into default and foreclosure.

The loans ranged in size from roughly $350,000 to $600,000. Losses to the lenders resulting from the scheme are expected to exceed $100 million.

Duke is scheduled to be sentenced by Judge Julian Abele Cook, Jr. on November 15, 2012.

Published: Mon, Jul 16, 2012


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