Postal Service Uses Reverse Mortgage ‘Scam’ for Good

Reverse mortgage professionals rightfully hate seeing stories of scams in the media — both because of the harm caused to the borrowers, and the potential hit that the products could take in the minds of the general public. But in an unexpected twist, one federal enforcement agency used a fake reverse mortgage scam to capture a man who had fleeced an elderly victim.

Kemal Barnes had spent years extracting more than $100,000 from a 79-year-old Texas widow, using aliases to trick the woman into sending checks to addresses in Massachusetts, where he lived at the time. His most recent scheme, according to a Tuesday report in the Boston Globe, involved a classic lottery scam: Using the alias “Mary Jones,” Barnes told the widow that she’d won a $5 million jackpot, but that she’d need to send $60,000 in advance to help release the full winnings.

The victim’s family got wind of the scam in 2015 and alerted authorities, prompting the United States Postal Service to set a reverse-mortgage trap. The woman had allegedly told Barnes that she was interested in tapping into more than $157,000 in Home Equity Conversion Mortgage proceeds; in turn, Barnes asked for $60,000 of that money for the phony jackpot.

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USPS agents then flipped the script on Barnes, instructing the victim to ask for $2,400 to cover closing costs on the phantom reverse mortgage. The scammer fell for it, sending the money to the victim and giving the agents the proof they needed. The USPS then sent a fake check for $60,000 to Barnes’s home in Malden, Mass., and arrested him for mail fraud once he opened it.

Barnes pleaded guilty and received a 15-month sentence, the Globe reported. As a Jamaican citizen who was living in the United States as a permanent resident, Barnes will be deported upon his release, the Globe noted.

Read the full story at the Boston Globe.

Written by Alex Spanko

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  • This is terrible to see and hear. I have a friend that is a reporter for a newspaper, he writes a senior section every Sunday, I will send him this article to put in his senior article.

    This story needs to be told to as many times it can be! A 15 month sentence was not long enough for Barnes, anyone perpetrating a scam like this on seniors should be punished severely and I mean severely!

    That is my opinion, for what ever it is worth!

    John A. Smaldone
    http://www.hanover-financial.com

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