Mortgage-Fraud Crackdown Is Gathering Steam in Florida
Florida’s Gulf Coast was crawling with shady real estate investors like Neil Husani during this decade’s housing boom. According to the U.S. Attorney’s office in Tampa, Husani and three co-conspirators working with his Sarasota-based Capital Force, Inc., bilked seven area banks out of $83 million in a mortgage fraud scheme. Between 2003 and 2006, they bought up dozens of properties, used false information to secure mortgages far in excess of the actual property values, then pocketed the difference, which amounted to more than $40 million. The properties went into foreclosure and the banks, as well as the surrounding communities, were left holding the bag. Two of Husani’s partners recently pleaded guilty to the conspiracy; another was convicted, and Husani, whose trial is pending in the U.S., has been arrested in Jordan, where he awaits extradition.
The Capital Force case is one of the largest mortgage frauds to date in Florida, but it’s just the tip of an iceberg of scams that have wrecked broad swaths of the state’s reeling housing and commercial real estate market. The situation is worst along the I-4 Corridor between the Tampa and Orlando areas, where almost 30,000 homes are in foreclosure. (Lee County, in fact, has one of the nation’s highest foreclosure rates, at about 12%.) In recent years, fraud — involving either property purchases like Capital Force’s, or schemes that falsely promise to help desperate homeowners hang on to their houses and then take the money and run — has mushroomed. Now, the U.S. Attorney’s office in the Middle District of Florida tells TIME, federal agents and prosecutors have embarked on a “surge” of mortgage and loan-modification fraud investigations that could result in more than 200 indictments this year in the Tampa region alone. “The idea is to do as many cases as we can at once,” says Tampa U.S. Attorney Brian Albritton, “to clearly send a message that this is not going to be tolerated.” (See 25 People to Blame for the Financial Crisis)