Indiana man sentenced for $1.5M Chicago mortgage fraud scheme
CHICAGO - A Schererville man has been sentenced to three years and three months in prison for being the mastermind behind a $1.5 million mortgage fraud scheme in Chicago.
What we know:
Lee Holliday, 66, admitted to recruiting buyers in 2011 and 2012 for properties on Chicago’s West and South Sides. He provided funds for down payments, which were only 3.5% of the purchase price, since the loans were insured by the Federal Housing Authority.
Holliday worked with buyers to purchase properties at inflated prices and then split the profits with both the buyers and sellers. Although he promised rental income from the properties, most buyers fell behind on mortgage payments, leading to seven foreclosures.
The fraudulent activity caused multiple financial institutions to lose $1.53 million through false loan applications.
In addition to the mortgage fraud scheme, Holliday admitted to fraudulently obtaining $391,869 in Paycheck Protection Program (PPP) funds during the COVID-19 pandemic.
What they're saying:
"FHA loans are intended to help people who could not otherwise afford a home," said Acting U.S. Attorney Morris Pasqual. "In this case, the money that was supposed to help those people and improve their neighborhoods instead went into the defendant’s pockets."
"Lee Holliday repeatedly engaged in an egregious mortgage fraud scheme causing borrowers to falsely represent critical income and asset information to qualify them for loans they would not have otherwise qualified for," said HUD-OIG SAC Jindra. "When people take advantage of HUD-insured mortgage programs, it limits opportunities for hard-working individuals trying to achieve the American dream of homeownership.
What's next:
Holliday will serve 39 months in federal prison.
The Source: The information in this article was provided by the U.S. Attorney's Office, Northern District of Illinois.