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Posted: Aug 18 2011, 07:32 PM
Friend of Ours
Member No.: 4,371
Joined: 18-April 10
Man sentenced to over 17 years prison in $35 million mortgage fraud scheme
Sun-Times Media Wire, August 18, 2011
A south suburban man who directed a mortgage fraud scheme that cost lenders about $16 million for properties on the South Side will spend more than 17 years in prison.
Kenneth Steward, 45, formerly of South Holland, was sentenced Wednesday to 17 1/2 years in federal prison for his role in a $35 million mortgage fraud scheme involving more than 120 residences, many in the Englewood, Roseland and Back of the Yards neighborhoods, according to a release from the U.S. Attorney’s office.
The sentence is one of the longest ever given to a mortgage fraud defendant in Chicago, the release said. The scheme cost lenders and financial institutions about $16 million in mortgage loans that were not repaid or recovered through foreclosure sales.
Steward, who was arrested and charged in July 2010, pleaded guilty in June to nine counts of wire fraud, four counts of bank fraud and three counts of mail fraud, the release said.
Between 2004 and 2008, he orchestrated the fraudulent purchase and resale of dozens of residences, and was responsible for about 109 fraudulent transactions, causing lenders to issue nearly $27.8 million in loans and lose more than $14.5 million. Of the 109 residences on the South Side, at least 74 fell into foreclosure.
Steward pocketed undisclosed payments and kickbacks from each transaction and also controlled about $3.1 million in post-closing funds over the course of the scheme, according to court records. He was also part of a larger scheme that involved a total of 122 residences and caused losses of about $16 million.
Despite almost no prospect of recovery, U.S. District Judge George Lindberg ordered Steward to pay more than $13.1 million in restitution and indicated he would enter a preliminary forfeiture judgment of $35 million, the release said.
Charges are pending against six co-defendants in the case.