Catchfence

“Seven accused; scheme called region’s largest”

Federal prosecutors in Detroit say a local crime ring ran a mortgage fraud scheme that cost lenders more than $100 million and was used to fund a lifestyle that included hot rod cars, international travel, palatial homes — even a helicopter.

A Fenton man and six others were accused Wednesday of playing a role in a scheme that in four years involved 500 fraudulent loans and roughly 180 homes in the region.

“This is the largest mortgage fraud we have seen in terms of the number of properties that were involved and the money that was stolen,” U.S. Attorney Barbara McQuade said in a statement.

The case is one of dozens that local prosecutors have handled — and is likely one of many to come, said Curtis Novy, a California-based expert on mortgage fraud.

Novy said the fraud, rooted in the relaxation of lending standards, can be blamed on the mortgage industry and Wall Street, which packaged the loans for investors.

And the victims are those who bought mortgage-backed bonds — and the neighbors of vacant homes headed for foreclosure.

“It would have a staggering effect on the neighborhood,” Novy said, including the steep decline in home values. “Everyone pays the price.”

From 2004-07, the FBI alleges that Duke and the others would arrange for loans and then take a portion of the loan money for themselves. Sometimes, the straw buyer would get paid for his or her efforts and the initial monthly payments would be made. However, those payments would stop, and in 80 percent of the cases involving homes, the residence would be allowed to go into foreclosure.

The ring targeted homes ranging in value from $350,000 to $600,000, according to the FBI, which identified transactions involving properties in Fenton, Highland Township and Davisburg.

The ring targeted homes ranging in value from $350,000 to $600,000, according to the FBI, which identified transactions involving properties in Fenton, Highland Township and Davisburg.

Michigan regulators banned Duke in 2006 from residential mortgage loan and financial services industries because of either “fraudulent or unscrupulous activity.” He consented to the ban but the FBI, in an affidavit filed with the federal complaint, alleges Duke was involved in the fraud scheme into 2007.

Last October, federal officials sought the forfeiture of a Flint bar, Choppers Lounge, claiming Duke used money from mortgage fraud to buy it.

The Detroit region had one of the highest rates of mortgage fraud during the explosion of subprime lending and communities across the area have seen thousands of homes go vacant as a result. Foreclosure wracked the region and pummeled neighborhoods throughout Detroit and the suburbs.

Duke, Ryan Zundel, 36, of Belleville and Wilinevah (Nevie) Richardson, 32, of Rochester Hills had initial appearances on Tuesday before U.S. Magistrate Judge Mark Randon. They were released on bond and ordered to appear again July 6. The other defendants are expected in court later this week.

The others named in the complaint were William (Bill) Camsell Wells III, 39, of Howell; Robert Charles Brierley, 43, of New Boston; Nicole Lynn Turcheck, 31, of Gibraltar; and Anthony Edward Peters, 72, of Belleville.

The FBI alleges that Duke used the money to buy a helicopter and expensive cars, and fund his business, Hardcore Racing.

Turcheck allegedly used the money to finance the Tryst Nightclub of Canton, and Wells used it to finance Hardcore Motorsports. Others allegedly used the money to buy boats, pricey residential property and to travel.

- Detroit News