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Real estate industry

Mortgage Fraud Scheme Exposed in Phoenix: $50 Million Scheme Results in Guilty Plea

Strategic Insights

— 1 min read

Brett Matheson, 46, has pleaded guilty to conspiracy to commit wire fraud in a $50 million mortgage fraud scheme based in Phoenix. The scheme, which operated from January 2005 through September 2006, involved recruiting straw buyers in real estate seminars and submitting false mortgage loan applications. Matheson, as President and CEO of Maricopa Property Investment Solutions, Inc., was instrumental in the scheme, which ultimately resulted in nearly $20 million in losses to lenders.

Key Takeaways:

  • Brett Matheson pleaded guilty to conspiracy to commit wire fraud in a $50 million mortgage fraud scheme based in Phoenix.
  • The scheme involved recruiting straw buyers in real estate seminars and submitting false mortgage loan applications.
  • Matheson, as President and CEO of Maricopa Property Investment Solutions, Inc., facilitated the submission of mortgage loan applications containing false information regarding employment, income, assets, and the intent to occupy homes as their primary residence.
  • 52 properties were involved in the scheme with nearly $50 million in fraudulent loans.
  • The arrangement between Matheson's company and the "straw" buyers was concealed from the lenders, and the kickbacks were often used on Matheson's personal expenses or to make down payments to qualify additional "straw" buyers for financing on other properties.
  • The losses to lenders approached $20 million.
  • The investigation was conducted by the Internal Revenue Service's Criminal Investigation Division and the Federal Bureau of Investigation.
  • Matheson's prosecution is part of an initiative called "Operation Stolen Dreams" in which dozens of defendants, including many real estate professionals, were indicted in the summer of 2010.
  • 27 of those indicted have been convicted through guilty pleas.

Statistics:

  • $50 million in fraudulent loans were involved in the scheme.
  • Nearly $20 million in losses to lenders and tax revenues.
  • 52 properties were involved in the scheme.
  • The scheme operated from January 2005 through September 2006.
  • 27 of the indicted defendants have been convicted through guilty pleas as part of "Operation Stolen Dreams".

Sources:

  • Federal Bureau of Investigation, Phoenix Division
  • Internal Revenue Service, Criminal Investigation Division
  • U.S. Attorney's Office, District of Arizona, Phoenix
  • Assistant U.S. Attorneys, Kevin M. Rapp and Monica B. Klapper

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