A 43-year-old Alexandria title agent has been accused of being member of a scheme to fraudulently buy 25 properties in Maryland, D.C. and Virginia, federal prosecutors in Maryland said.
The homes later went into foreclosure, causing $7 million in losses to lenders.
Jay Leonard also is charged with soliciting $10 million from investors for a resort and spa in Virginia that he and co-conspirators falsely claimed they were developing, according to an indictment filed in Maryland’s federal court Wednesday. About $478,000 from that scheme were transferred directly into Leonard’s bank account, prosecutors said.
On Monday, Osman Al-Bari, 35, pleaded guilty to running the scheme.
Between February 2006 and September 2008, Leonard used his position as a title agent to help his co-conspirators purchase 25 properties in the Washington area, in part, by helping buyers lie on their loan applications, the indictment said.
The buyers were paid $10,000 per property, and, court documents said, the co-conspirators collected the loan money and additional cash by claiming they had done renovation work on the property.
One buyer, Sabrina Weinberg, earned about $40,000 for the four properties she purchased on behalf the scheme, prosecutors said. According to the indictment, Leonard had Weinberg sign false affidavits for mortgage companies claiming that each of the homes was her primary residence. Leonard later kicked back the loan money from the Weinberg properties to Al-Bari and others, disguising the $515,000 in wire transfers as money owed for renovations.
Weinberg pleaded guilty to mail fraud in March.
Leonard faces up to 30 years in prison for each of the four counts of mail fraud and the five counts of wire fraud that are pending against him. The scheme was uncovered by the Maryland Mortgage Fraud Task Force, a group of 15 federal, state and local law enforcement agencies working together to quickly detect and prevent mortgage fraud. The task force was formed in response to rampant fraud cases that emerged during and after the real estate boom.
