Biting Off More Than Can Be Chewed

11931923 - house of the money in his hand on the background of a new home

Sometimes, a person who bites off more than he or she can chew can get into some big trouble. An article published in The Roanoke Times is not talking about a person who ate too much, but a woman who got in over her head on a construction project that resulted in a $10.6 million mortgage fraud scheme. In an attempt to recover from a bad housing market, she lied on tax forms about her income and committed tax fraud. (She’s going to need more than heartburn medicine to recover from this overindulgence in fraud.)

The story states that the woman was the majority owner in a construction company that built luxury homes on a Virginia lake. Her scheme involved purchasing land, inflating the prices and selling the much higher priced lots to straw buyers, who were brought in to further the scam. (By inflating the prices, the straw owners were able to obtain higher construction loans.) The straw owners were paid kickbacks ranging from $5,000 to $20,000 in exchange for their assistance.

Then the housing market went belly up. The construction company owner was unable to sell the luxury home already built and some of the straw owners were stuck with the remaining balance on the mortgages. (Lenders foreclosed on some of the houses, while others are currently up for sale.) The banks’ total losses were nearly $11 million. As if that wasn’t bad enough, it gets worse. When filing her tax returns during this volatile time, the woman underestimated her income so she could pay less in taxes.

The 50-year-old woman pleaded guilty to one count of mortgage fraud conspiracy and one count of tax fraud. She is facing up to 10 years in prison. The fraudster also is required to pay the lenders she defrauded more than $10.6 million, as well as nearly $180,000 to the IRS. Two of her co-conspirators, who were former mortgage brokers, have already pleaded guilty in the case.

Fraudsters usually want to make as much money as possible regardless of the cost to their victims or to themselves if caught. (Their eyes are almost always bigger than their stomachs.) In this case, it sounds like justice has been served. The next time this fraudster thinks about bilking the federal government, perhaps she’ll pass on the opportunity to commit a crime citing that she is now on a fraud diet.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Moneta Business Owner Pleads Guilty in Mortgage Fraud Scheme,” written by Barrett Mohrmann and published by The Roanoke Times on October 30, 2014.

A Moneta business owner who led a Ponzi scheme defrauding banks and mortgage lenders of nearly $11 million pleaded guilty in federal court Thursday.

Susanne Helbig, 50, formerly of Roanoke, pleaded guilty to one count of mortgage fraud conspiracy and one count of tax fraud in United States District Court for the Western District of Virginia.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.