MAN WHO RECRUITED REAL ESTATE PROS TO CARRY OUT MORTGAGE FRAUD GUILTY

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Education & Training with The Real Estate Mart of Tennessee, Inc. TN LIC# 290452

Federal Jury Finds Jacksonville Man Guilty of Mortgage Fraud

U.S. Attorney’s Office October 11, 2012
  • Middle District of Florida (904) 301-6300
 

JACKSONVILLE—U.S. Attorney Robert E. O’Neill announces that a federal jury today found Kessler Holzendorf (43, Jacksonville) guilty of conspiracy, multiple counts of mail fraud, and multiple counts of wire fraud in connection with his involvement in a large-scale mortgage fraud scheme. Holzendorf faces a maximum penalty of 20 years in federal prison for each of the 31 counts. His sentencing hearing is scheduled for January 28, 2013. Holzendorf was indicted on April 13, 2011.

According to testimony and evidence presented at trial, Holzendorf was one of the masterminds behind a complex scheme to defraud a number of mortgage lenders on loans for high-end properties in the Jacksonville area, including a number of homes in the Bartram Springs subdivision.

The scheme involved Holzendorf and others recruiting real estate professionals as investors who, with Holzenorf’s assistance, submitted false loan applications and inflated purchase prices for the sales.

The loan applications included inflated sales prices, some false claims that investors were occupying the properties as their personal residences, and other false claims regarding the investors’ employment status and income levels.

For each of the properties, lenders were tricked into believing that home improvements, usually noted as swimming pools, were being made to the properties.

In fact, no improvements were ever made.

Funds (ranging from $50,000 to $250,000) for these improvements were paid through title companies for sham invoices payable to a sham company (Home Improvements and Repair by Design), which was controlled by Holzendorf. Following the closing,

Holzendorf, who usually kept a fee, would return the funds to the buyers.

As a result of the scheme, the lenders were tricked into providing substantial sums of money to the buyers at closing.

The scheme also included a real estate agent and a mortgage company affiliated with Holzendorf. Evidence introduced at trial showed that Holzendorf and other conspirators obtained real estate commissions of more than $339,000, mortgage broker compensation of more than $189,000, and illegal kickbacks to buyers of more than $1.1 million.

In commenting on the verdict, United States Attorney O’Neill noted, “Our office remains committed to prosecuting those involved in these types of fraudulent crimes. Mortgage fraud continues to be a priority of the Department of Justice and our district.”

FBI Special Agent in Charge of the Jacksonville Field Office Michael Steinbach commented, “The FBI is committed to vigorously pursuing the perpetrators of mortgage fraud at every level, and these investigations remain one of our top national priorities.”

FDLE Special Agent in Charge of the Jacksonville Region, Dominick Pape, stated, “The partnership of all the agencies associated to this case has led to an outstanding result. This outcome should send a message to potential violators that mortgage fraud will not be tolerated in Northeast Florida.”

This case was investigated by the Federal Bureau of Investigation and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorneys Mark Devereaux and Mac Heavener.

source: FBI
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Topic:
ActiveRain Community
Location:
Tennessee Shelby County Memphis
Groups:
Realtors®
Crime
Tags:
real estate fraud

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Rainmaker
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Greg Nino
Houston, Texas
RE/MAX Compass, formerly RE/MAX WHP

I know this isn't your content, but I love the outline of events and what happened. We should alway remember what happens to those who try to game the system, kill Realtor repuations, defraud and lie.

Good stuff.

October 12, 2012 09:35 AM
Rainmaker
1,179,080
David Saks
Memphis, Tennessee
The Real Estate Mart of Tennessee, Inc.

Nearly all of the crime blog entries are forwarded from the FBI, Greg, and there are hundreds of them in my index.

Thousands of licensees have resigned from the real estate business, and continue to resign daily, not just because of the economic factors, but because of deceit and corruption carried out at levels never before witnessed in history.

There's more corruptuion in the real estate business than in any other profession in the world, excepting medicine, prostitution and wall street, and it's impact is ripping the nation apart.

It cannot be denied.

The time has arrived to do something about it.

Thanks for your comments.

October 12, 2012 10:01 AM
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Rainmaker
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David Saks

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