Former Real Estate Appraiser Sentenced to Three Years in Prison for Mortgage Fraud Scheme

Strategic Insights -

In a massive mortgage fraud scheme, Lila Rizk, a former state-licensed real estate appraiser, was sentenced to three years in federal prison and ordered to pay over $46 million in restitution. The scheme involved inflated mortgage loans on homes in California's most expensive neighborhoods, resulting in tens of millions of dollars in losses to federally insured banks. Rizk's trial evidence showed she used bogus purchase contracts and appraisals to deceive banks, collecting hundreds of thousands of dollars in fees for providing inflated appraisals. Her appraisals typically valued homes three times higher than their actual cost, using "comps" or comparable homes that were far more luxurious and in better neighborhoods.

Key Takeaways:

  • Lila Rizk, a former state-licensed real estate appraiser, was sentenced to three years in federal prison for her role in a massive mortgage fraud scheme.
  • The scheme resulted in tens of millions of dollars in losses to federally insured banks, with Lehman Brothers Bank alone losing over $80 million due to 80 inflated loans.
  • Rizk's appraisals typically valued homes three times higher than their actual cost, using "comps" that were far more luxurious and in better neighborhoods.
  • The scheme leader, Charles Elliott Fitzgerald, was previously sentenced to 14 years in prison, and ten other real estate professionals have been convicted of federal charges related to the scheme.
  • The evidence presented at trial showed that Rizk profited from the scheme by collecting hundreds of thousands of dollars in fees for providing inflated appraisals.
  • The scheme involved over 80 inflated loans, with losses totaling tens of millions of dollars, and affected homes in some of California's most expensive neighborhoods.

Statistics:

  • Lila Rizk was sentenced to three years in federal prison.
  • The Scheme resulted in tens of millions of dollars in losses to federally insured banks, with Lehman Brothers Bank losing over $80 million due to 80 inflated loans.
  • Rizk's appraisals typically valued homes three times higher than their actual cost.
  • The scheme leader, Charles Elliott Fitzgerald, was previously sentenced to 14 years in prison.
  • Ten other real estate professionals have been convicted of federal charges related to the scheme.

Sources:

  • United States Attorney's Office for the Central District of California press release, no date provided.