A member of San Diego's Lincoln Park gang pleaded guilty Friday to being part of an extensive mortgage fraud scam involving bank fraud and money laundering, among other crimes. Federal authorities have said that Darnell Bell, or D-Bell, was the leader of the racketeering conspiracy, an operation that included an appraiser, a notary, an escrow officer, a tax preparer, and a real estate broker. The scam used fraudulent loan applications and escrow documents as well as straw buyers to "purchase" over 100 properties in San Diego County.

The scam worked by first identifying properties that had been sitting idly on the market for months. Straw buyers were recruited to purchase the property with 100 percent borrowed money. The gang paid more than the asking price for the property and deposited the overage amount in an account set up by Bell in the name of a fake construction company. In the end, the "buyers" would default on their mortgage and the property would end up in foreclosure, leaving the bank with the losses. The scam reportedly resulted in losses of $20 million to $50 million. Bell's bank account reportedly held $9 million in profits from the scam.

 

Bell, 39, could face a maximum of 20 years in prison. He is the fourth person to plead guilty in this case. Michael Ivy earlier pleaded guilty to a conspiracy charge. Ivy owned The Real Estate Center in La Mesa, which authorities say played a main role in the scheme. They claim Ivy received $200,000 for his participation. Authorities also say Stanley Gentry, a real estate broker, was paid a $10,000 fee each month for giving the gang access to real estate listings.

The indictment lists 24 people involved in the kickback scam, including at least thirteen buyers. Some of the straw buyers have been offered a "package deal" plea agreement proposal. Those who have pleaded guilty so far are awaiting sentencing.

 

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