Two defendants were charged Friday for their roles in a reverse mortgage fraud scheme that targeted elderly homeowners in Georgia.
The defendants, Edmund Chatham, of Roswell, Ga., and Steven Connelly, of Alpharetta, Ga., were indicted on one count of Racketeering, according to the Georgia Attorney General’s office. Through the scheme, the two men allegedly scammed seniors to fraudulently obtain reverse mortgage payouts from lenders.
According to the AG, the scheme took place between January 2008 and January 2009, during which the defendants “helped put senior citizens into five homes in Atlanta.” They then assisted the homeowners in obtaining reverse mortgages on their homes using fraudulently inflated home appraisals and concealed the fees they paid for reverse mortgage referrals.
Unnamed lenders made loans based on the fraudulent appraisals and generated payments to the borrowers for which they would not have otherwise qualified. The defendants obtained proceeds and fees at the time of the loan closings, at which point the homeowners received little or no money from the refinances, according to the AG.
All of the fraudulent loans were made and endorsed under the Federal Housing Administration’s Home Equity Conversion Mortgage Program.
The charges are punishable by five to 20 years in prison and a fine of $100,000 or three times the pecuniary value gained by each defendant, the AG said in announcing the indictment.
The case was investigated by Department of Housing and Urban Development agents.
Written by Elizabeth Ecker