Washington, DC — (LoanSafe.org) – Commissioner Gennet Purcell, Esq., of the DC Department of Insurance, Securities and Banking (DISB) today announced the indictment of Renaldo D. Gillis and Afolasade Orekoya for their leadership in an extensive mortgage fraud “flipping” scheme in the District of Columbia after a joint investigation with federal law enforcement.
“The indictment of these two men sends a clear message that we will use every tool at our disposal to fight against mortgage fraud and any other fraudulent acts against our hardworking District residents,” said Commissioner Purcell. “We will not tolerate mortgage fraud in the District of Columbia as it ruins lives, destroys families and devastates communities.”
The indictment of these two individuals was part of a nationwide takedown that targeted mortgage fraud throughout the country. Operation Stolen Dreams was organized by President Obama’s interagency Financial Fraud Enforcement Task Force, which was established to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring a powerful array of criminal and civil enforcement resources. Starting March 1, Operation Stolen Dreams has involved 1,215 criminal defendants nationwide, including 485 arrests, who are allegedly responsible for more than $2.3 billion in losses. Additionally, the operation has resulted in 191 civil enforcement actions, which have resulted in the recovery of more than $147 million.
However, before the task force was formed, DISB had already initiated an investigation into the mortgage flipping scheme more than four years ago. A federal grand jury returned a 14-count indictment charging Gillis, 42, a licensed real estate appraiser and alleged real estate investor in the District of Columbia; and Orekoya, 40, a licensed real estate agent and independent loan processor for mortgage brokers, with conspiracy and multiple counts of bank, mail, and wire fraud for their leadership roles in an elaborate, years-long mortgage fraud scheme.
According to the indictment, from 2003 to 2009, the defendants and their co-conspirators targeted many District of Columbia-area homes for quick resales (called “flips”) at fraudulently inflated prices. Gillis recruited others to act as “straw buyers” of the properties. The straw buyers submitted loan applications to Orekoya, who inputted false information on the loan applications (typically inflating the straw buyers’ assets and income) and submitted them to mortgage lenders, including banks. Meanwhile, Gillis also generated fraudulent appraisals which falsely inflated the value of the properties (in reality, the properties were often in poor condition). The properties were then quickly resold (or flipped) to new straw buyers at increasing prices supported by the inflated appraisals.
The mortgage fraud scheme netted Gillis, Orekoya, and their co-conspirators more than $1 million in illegal proceeds and caused the lending institutions to lose over $2.3 million. If convicted, the defendants face decades of imprisonment and fines in excess of $1,000,000. In addition, the United States is pursuing, through criminal forfeiture, a money judgment of over $1,000,000 against the defendants, as well as a house owned by Gillis in Georgia.
Besides DISB, others involved in the task force investigation included US Attorney Ronald C. Machen Jr.; Inspector in Charge, Washington Division Daniel S. Cortez of the US Postal Inspection Service; and Inspector General Kenneth M. Donohue of the US Department of Housing & Urban Development.
The charges contained in the indictment are merely allegations. The defendants are presumed innocent until and unless found guilty in a court of law.
For more information on the task force, visit www.StopFraud.gov. DISB works for consumers to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint visit www.disb.dc.gov or contact DISB at