Feds to announce mortgage fraud indictments at Limbaugh Courthouse on Monday

Federal prosecutor Catherine Hanaway on Monday will announce the indictment of two defendants in a "significant mortgage fraud case" in Southeast Missouri, a spokeswoman said Friday.

Hanaway will hold a news conference at 2 p.m. Monday at the Rush Hudson Limbaugh Sr. U.S. Courthouse, where the sealed indictments will be opened and the defendants named, spokeswoman Jan Diltz said.

Restrictions on the release of information from sealed indictments prevented Diltz from giving more details. She could not give any information on the number of counts or the location where the alleged mortgage fraud occurred, she said.

The indictments are being announced while U.S. and world stock markets continue to reel from the subprime mortgage crisis. The crisis has toppled major banks and forced governments worldwide to pump trillions of dollars into financial markets to maintain them.

In the U.S., lawmakers have approved a $700 billion bailout of the banking industry, with potentially more needed.

The Southeast Missouri fraud case announcement comes on the heels of federal mortgage fraud indictments and convictions in other jurisdictions, including charges filed against 17 people in an alleged $12.6 million scheme that targeted upscale neighborhoods in Kansas City suburbs.

In those indictments, reported Oct. 29 in the Kansas City Star, the scheme included kickbacks to homeowners, purchases through shell companies and giving false information to lenders in order to support the purchase of 25 homes at inflated prices.

In Houston, federal prosecutors charged a mortgage broker with conspiracy, wire fraud and money laundering in a more than $12 million scheme that used fraudulent appraisals, falsified loan applications and kickbacks to purchasers who helped with the scheme.

And in Riverside, Calif., federal prosecutors charged two people with mortgage fraud for false statements to mortgage lenders in connection with a mortgage broker whose clients bought 120 homes in 2005 and 2006 and later abandoned the homes to foreclosure.

rkeller@semissourian.com

388-3642