Paper Economy - A US Real Estate Bubble Blog

Wednesday, November 15, 2006

Gangsta Broka!

Remember the good old days when inner city gangs had real “street cred”?

Drive-bys, crack dealings, east-cost west-cost rivalries, Tupac, Biggie… it all seemed to be keeping it so real.

Well, it seems that in Chicago, one gangsta found a now all too familiar way to make some serious bling with little to no gunplay, that is, until the police raided his crib on Tuesday confiscating $750,000 in luxury vehicles and leaving him facing 23 counts of tax evasion and money laundering.

The crime… mortgage fraud or as its better known these days… being a real estate or mortgage broker.

Apparently, Terry Faulkner, a member of the well know south side Chicago gang the “Gangster Disciples”, ran a mortgage fraud scheme that ripped off "unsophisticated" home buyers for hundreds of thousands of dollars.

Amazingly though, it’s almost impossible to distinguish Faulkner’s actions from that of the thousands of sketchy real estate agents or mortgage brokers that have made sham deals now commonplace.

Here’s how the scam worked (from the Chicago Tribune article):

Real estate dealer Brian Urbanowski, who runs URB and another firm, XEZ Inc., bought numerous distressed South Side properties for low prices, many of them acquired at tax auctions.

Faulkner would locate victims with an unsophisticated understanding of real estate transactions and entice them into becoming a real estate "investor," promising they would reap a windfall profit with no up-front money, according to the search warrant application. Faulkner would then select an URB or XEZ property and offer it for sale to the "investor."

Faulkner would bring the victim to Rodrigo Navascues, a mortgage broker, who would create a mortgage application that inflated the would-be investor's income, assets and savings, making the applicant appear credit-worthy when in fact he or she was not, according to the search warrant application.

Then an appraiser in Palos Heights would assess the property at a "wildly inflated price," the search warrant application said. The appraiser has not been charged with any crime. Police searched that Palos Heights office Tuesday.

The victim would obtain a mortgage loan and buy the home at the inflated price. At the closing, the loan proceeds were wired to Urbanowski, or URB, according to the search warrant application. Urbanowski or his company "reaps a huge profit, usually amounting to 200 percent of investment," the application said.

The victim, meanwhile, is left with a dilapidated building and a mortgage he or she cannot repay.




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12 Comments:

  • Good article. That picture kills me! lol

    Brian

    By Anonymous Chicago Real Estate, at 10:16 AM  

  • Good article. That picture kills me! lol

    Brian

    By Anonymous Chicago Real Estate, at 10:24 AM  

  • These people got caught. Just think of all the others running around out there getting away with it.

    By Anonymous Snap Up Real Estate, at 1:28 PM  

  • Scoundels like this are the exact reason HB4050 was passed.Vermin like this are to thank for all the new legislation which severly effects consumers rights and options
    If found guilty they should throw the book at them.Send a message to other vermin in the same practice, That message being, You will Pay !
    and ... Don't drop the soap !

    By Anonymous Anonymous, at 7:01 PM  

  • I guess it all depends on how you look at it. If I sell a bottle of liquor to someone over 21 and he sells it to a minor for $10 more, am I at fault? If URB is the main company, person in this scam, how come they haven't been charged but others have?

    By Anonymous Anonymous, at 2:51 PM  

  • In the past few years i have purchased a couple of properties from URB and i have sucessfully made a profit of $20,000+ on each deal. If you follow their system and advice you could also do the same. Urb was their for me during the entire transaction if i had a question i would just call and they would give me the solutions. And i still, till this day look for rehab properties through URB, i think their website has changed to www.urbonline.net, it looks like the other website was taken by some copycats.

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