Real Estate & Property Law
‘Bonnie and Clyde’ of Mortgage Fraud Stole $8.7M, Feds Say
Posted Oct 30, 2008 11:11 AM CST
By Martha Neil
A high school dropout and former house cleaner who became a Las Vegas real estate agent is now accused, with her husband, of being the Bonnie and Clyde of real estate fraud.
Eve Mazzarella, 31, and her husband, Steven Grimm, 45, were arrested by federal agents at their home in March, after the U.S. Attorney in Nevada indicted them on charges of bank fraud. They are accused of arranging for straw buyers to apply for mortgage loans to purchase 227 homes purportedly worth a total of $107 million, then skimming funds from the transactions when they closed, reports Bloomberg, which describes Grimm as an "erstwhile mortgage broker."
By doing so, the couple allegedly stole $8.7 million, of which about $50,000 has been located by the government. Lax mortgage lending practices in recent years, including a practice of not verifying the incomes of certain buyers with good credit, reportedly helped the couple pull off the claimed bank fraud scheme.
"They allegedly arranged fake sales on some houses five times. Then, according to the indictment, they walked away from the mortgages, leaving lenders in the lurch," the news agency writes.
According to the article, Mazzarella and Grimm didn't actually own the properties they are accused of selling to straw buyers, but paid individuals with good credit about $5,000 per transaction to enter into real estate contracts and apply for mortgages. Then the pair allegedly arranged for larger mortgages than the selling price, to cover "repair" or home-improvement costs, pocketing the difference.
They told the buyers they would pay the mortgage, prosecutors contend, and the buyers transferred the properties into limited liability companies controlled by Mazzarella and Grimm. When they didn't make the payments as promised, buyers reportedly faced foreclosure and, in some cases, bankruptcy.
The pair have pleaded not guilty in federal court in Las Vegas, and Mazzarella's father, a San Diego real estate lawyer, says she is innocent, the Bloomberg article continues.
"She was putting money in Las Vegas real estate like everyone else,'' says Mark Mazzarella. "The targets are going to be higher up the food chain.''