Posted Jul 20, 2007 09:47 pm CDT
Following a three-year investigation, six men have been arrested by Florida authorities and charged with racketeering and conspiracy in a home-repair scam that allegedly bilked at least 31 homeowners of $3 million.
Run at least in part by a recently released convict, the alleged scheme preyed on low-income and minority homeowners, helping them borrow money from their home equity for repairs that were never completed, reports the St. Petersburg Times.
Several of those charged set up mortgage, title and construction companies to pursue the scam, according to authorities. Two other defendants allegedly worked for a major California mortgage company and accepted bribes to process fraudulent applications. That mortgage company has assisted victims and refunded their money, the newspaper reports.
“The ripple of effects of what we are alleging here in West Florida are enormous,” says Robert Robillard of the Hillsborough Consumer Protection Agency, in the Tampa area. “Every consumer may be adversely affected by this. You have fraudulent loans. The effect of these loans being bad is felt on Wall Street. It is felt in the housing market. … Nobody likes a bad loan.”