Posted Mar 17, 2010 05:24 pm CDT
Updated: Add at least two more lawyers to the ever-lengthening list of real estate attorneys criminally charged over their alleged participation in mortgage fraud schemes.
Among 40 defendants charged by a federal grand jury indictment (PDF) announced this week in a Texas case are Daniel Ayers and Anthony Flores, reports the DMN Investigates blog of the Dallas Morning News.
The two, who reportedly served as title company attorneys or escrow officers in real estate transactions at issue in the case, are 1996 graduates of Southern Methodist University’s law school.
They allegedly were recruited by a Florida businessman, along with real estate agents, mortgage brokers, property appraisers, straw buyers and others, to participate in a Dallas-area mortgage scheme. “The purpose of the scheme was to defraud lending institutions by convincing them to approve mortgage loans for residential properties for which the property values had been fraudulently inflated,” states a U.S. Department of Justice press release about the Eastern District of Texas case.
The case concerns some 114 houses in the Dallas area, on which lenders lost about $20 million, although all of the defendants are not accused of participating in all of the transactions at issue. Half of the $20 million allegedly went to the scheme’s claimed ringleader, Florida businessman John Barry.
Attorney David Finn represents Ayers. He tells the ABA Journal that his client was cooperating with the government before the indictment was handed down in what Finn describes as a “massive” investigation and will continue to do so. He anticipates that a voluntary surrender date for Ayers will be arranged next week.
“I believe that the evidence will show that my client allowed himself to be sucked into the vortex of fraud and deceit perpetrated and orchestrated by Mr. Barry,” says Finn in an e-mail to the ABA Journal. “The evidence will show that, unlike Mr. Barry, who allegedly pocketed approximately $10 million, my client derived very little financial benefit from the transactions outlined in the Indictment.”
Barry could not be reached for comment by the Dallas Morning News, which apparently didn’t attempt to contact the other defendants. The phone number listed for the Ayers & Flores firm on its website is temporarily disconnected, according to a recorded message that responded to an ABA Journal call, and Flores did not immediately respond to an e-mailed request for comment by the ABA Journal.
The indictment includes charges of mail fraud, conspiracy to commit mail and wire fraud, and money laundering.
“We’re trying to capture and take on the entire apparatus that he had established,” said U.S. Attorney John Bales of Barry in an interview yesterday with the Dallas Morning News.
He tells the newspaper he expects to announce more mortgage fraud cases soon.
Updated at 1:10 p.m. to include information from Finn.