Newspaper article The Florida Times Union

Criminals See Green in Real Estate Fraud, Investigator Says; Georgia's 2005 Residential Mortgage Fraud Act Is Helping Prosecutors

Newspaper article The Florida Times Union

Criminals See Green in Real Estate Fraud, Investigator Says; Georgia's 2005 Residential Mortgage Fraud Act Is Helping Prosecutors

Article excerpt

Byline: JOE JOHNSON

ATHENS, Ga. -- Drug dealers and other hard-nosed criminals are finding their way from the street to the real-estate market, according to state Assistant Attorney General David McLaughlin, who heads the investigation into an alleged fraud scheme in Athens-Clarke County that might be the largest in Georgia's history.

"This is armed robbery without a gun," McLaughlin told a group of nearly 100 Realtors and other real-estate professionals Thursday at a meeting of the Athens Women's Council of Realtors.

"I got a guy who was convicted of drug trafficking, and the first thing he did when he walked out of jail was mortgage fraud," McLaughlin said. "And where do you think he learned it? In prison. We've shifted from the traditional white-collar criminals to the real bad, bad people doing these crimes."

The women's council invited McLaughlin to speak at their annual luncheon after police began to arrest people in a massive mortgage fraud investigation that involves about 100 of the 124 houses in Milford Hills, a subdivision off Barnett Shoals Road, according to the Realtor group's president, John Morrison.

"Because of everything that's going on, we thought it was especially important to let new agents understand what mortgage fraud is, how it occurs and how to avoid getting caught up in it," Morrison said.

Agents who don't know the red flags to look for, such as houses selling at inflated prices for home improvements that were never done, can unwittingly become a party to fraud, he said.

Georgia leads the nation in mortgage fraud cases, according to McLaughlin, who drafted the Georgia Residential Mortgage Fraud Act that was signed into law in May 2005. …

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