Operation Stolen Dreams Racks Up More Mortgage Fraud Guilty Pleas

June 23, 2011

"Operation Stolen Dreams"  is the federal and state law enforcement sweep that targeted mortgage fraud in 2010, at which time it was reported over 1,200 individuals were named as defendants resulting in over 600 indictments for crimes resulting in over $2 Billion in losses.  

Guilty Pleas

As part of Operation Stolen Dreams, on June 20, 2011, Brett Matheson, 46, President and CEO of Maricopa Property Investment Solutions, Inc., pleaded guilty in federal court to conspiracy to commit wire fraud in a $50 million mortgage fraud scheme based in Phoenix. Two others have also entered guilty pleas and are awaiting sentencing.

Straw Buyers

According to the government's case, from about January 2005 through September 2006, Maricopa Property Investment Solutions, Inc. arranged to use "staw" buyers (recruited at real estate seminars by Matheson) to hide the true identity of property buyers from lenders. Further, Matheson facilitated the submission of mortgage loan applications for unqualified straw buyers. Those applications contained false information regarding employment, income, assets and the applicant's intent to occupy homes as their primary residence. In some cases, the application were supported by altered pay stubs, false bank statements, and bogus verifications of employment and deposit. For example, Matheson personally obtained financing for the purchase of two properties using altered pay stubs and bogus verifications of employment.

Kick Backs

At closing, a portion of the seller proceeds were kicked back to an entity controlled by Matheson and his co-conspirators. The kickbacks were often used on Matheson's personal expenses or to make down payments to qualify additional "straw" buyers for financing on other properties. In total, 52 properties were involved in the scheme with nearly $50 million in fraudulent loans, which lead to nearly $20 million in lender losses.

Facing the Music

A conviction for a single count of conspiracy to commit wire fraud is punishable by a maximum fine of $1 million, a maximum term of imprisonment of 30 years, or both, and a term of supervised release of five years.