Dozens arrested in loan fraud scheme with victims in U.S, Canada

Tue Jul 10, 2012 7:59pm EDT
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By Neale Gulley

BUFFALO, New York (Reuters) - Dozens of people were charged in what federal authorities on Tuesday called a highly sophisticated loan fraud scheme that robbed $2.7 million from at least 2,000 victims with poor credit histories in Canada and the United States.

Would-be borrowers were lured to websites of 67 fictitious businesses with names similar to well-known lenders such as "Countrywide Funding," which sounds similar to the legitimate Countrywide Financial Corp., and "Admiral Financial Services," which mirrors Admiral Financial Corp., authorities said.

They were approved for loans in exchange for security deposits ranging from a few hundred dollars to several thousand dollars - to be sent in advance of the flow of borrowed cash that never arrived.

"This was a highly sophisticated effort to appeal to Americans who were most vulnerable," U.S. Immigration and Customs Enforcement Director John Morton said at a news conference.

"It was a big, fat fraud that duped not hundreds but thousands," Morton said.

The six-year-long scheme targeted loan seekers with poor credit, luring them by classified ads to the phony financial services web sites, said U.S. Attorney William Hochul at the news conference. The fraudulent websites included bogus testimonials from imaginary borrowers.

"It began in most instances with an Internet search," Hochul said.

A tip from a Buffalo grocery store clerk who grew suspicious over the hucksters' repeat money transactions triggered an investigation in 2008 that eventually uncovered the multi-million dollar international crime scheme.   Continued...