Former Tucson loan officer sentenced in mortgage fraud case

In the following press release John S. Leonardo, United States Attorney for the District of Arizona announced that on May 6, 2013, Rex Adams, 54, of Tucson, Ariz., was sentenced by U.S. District Judge David C. Bury to 18 months in federal prison for committing wire fraud and transactional money laundering, both felonies. Adams had previously pleaded guilty on Jan. 7, 2013, to these charges which relate to mortgage fraud.

As part of his guilty plea, Adams admitted that he obtained a $268,000 loan to purchase a property in Tucson. In order to obtain this loan and as part of the loan approval process, Adams knowingly submitted loan applications and other documents that contained material false representations including: (1) falsely representing his intent to reside at the property as a primary residence; (2) submitting a fraudulent lease agreement stating that he had a tenant for his current home and would receive monthly rental income of $3,500; (3) falsely representing that the down payment or cash to close on the property would be a $66,473.56 check; (4) falsely representing and inflating the purchase price of the property as $335,000; and (5) failing to disclose to the lender that he received $12,349.05 cash back from the seller of the property using the fraudulently obtained loan proceeds. In fact, without the lender’s knowledge, Adams fraudulently obtained the mortgage at an inflated price with 100% financing, with no down payment and received $12,349.05 cash back from the seller.

As part of the defendant’s plea, he will also be ordered to pay restitution. The amount of restitution will be determined during a future hearing or by agreement of the parties.

The investigation in this case was conducted by Internal Revenue Service Criminal Investigation. The prosecution was handled by Jonathan Granoff, Assistant U.S. Attorney, District of Arizona, Tucson.

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