A Minneapolis mortgage broker pleaded guilty for his role in a $20 million mortgage fraud scheme and a Cincinnati real estate agent was indicted in an unrelated mortgage fraud, according to the U.S. Attorney’s Offices in each state. Both cases involve similar mortgage scams that proliferated during the run-up of housing prices in which scammers found “straw buyers” to buy homes at inflated prices, and used some of the loan proceeds for kickback payments to borrowers or for “fees” to the real estate agent or mortgage broker who arranged the deal. In the Minnesota case, Derrick Ivan Lance, 40, of Edina, pleaded guilty to conspiracy to commit wire fraud. Lance admitted that between 2004 and 2007, he conspired with others to obtain mortgage loan proceeds based on fraudulent documentation, according to the U.S. Attorney’s office. Unnamed co-conspirators identified residential properties available for purchase and recruited buyers for those properties. They told buyers they would receive payments after the property transactions closed, and that they could put those payments toward the mortgages or use them to improve the properties. Lance admitted submitting false mortgage loan applications, which misrepresented the buyers’ true financial situation. Based on those fraudulent documents, loans were approved, and loan proceeds were disbursed into various bank accounts not associated with the property buyers — to conceal the undisclosed kickbacks. Lance received approximately $200,000 for assisting buyers to secure mortgage loan funding for 26 properties, according to the U.S. Attorney’s Office. He faces a potential maximum penalty of 20 years in prison. In the Cincinnati case, Rodney Riddle, 44, is accused in a federal indictment of mail fraud, wire fraud and bank fraud. Riddle, who pleaded not guilty, faces up to 30 years in prison if he is convicted. Riddle persuaded dozens of people, including friends and fellow members of his church, to buy houses at inflated prices so he could collect lucrative fees, according to the Cincinnati Enquirer. He obtained nearly $7 million worth of fraudulent loans from 2001 to 2006 involving 59 properties, according to the indictment. Riddle’s home repair company also received kickbacks from the loan proceeds, according to court records. The scam began to unravel after the financial crash in 2008, when many of the homeowners fell into foreclosure, according to the newspaper. Write to Kerry Curry. Follow her on Twitter @communicatorKLC.

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