Mark Steven Diamond ,68, Chicago, Illinois, a businessman was sentenced today to more than 17 years in federal prison for bilking elderly homeowners in a reverse mortgage and home repair scheme.
Diamond schemed with others to induce homeowners to unwittingly obtain reverse mortgage loans to pay for purported home repairs that Diamond offered to perform. Diamond and the co-schemers targeted elderly victims in the Chicago area based on the amount of equity in their homes and their relative lack of financial sophistication. In some instances, Diamond concealed from the homeowners that they were applying for reverse mortgage loans by falsely representing that they needed to sign certain documents to start the repair work, when, in fact, the documents that Diamond caused them to sign were related to applying for the loan. After the loans were approved and originated by co-schemers, Diamond fraudulently pocketed the loan proceeds and often failed to perform any repairs.
Diamond pleaded guilty last year to a federal charge of wire fraud affecting a financial institution. In addition to the 205-month prison sentence, U.S. District Judge Franklin U. Valderrama ordered Diamond to pay $2.7 million in restitution.
All four co-schemers charged in the investigation – loan originators Gary Bohn, Hoffman Estates, Ill., and Matthew Fefferman, Munster, Indiana., Diamond’s employee Cynthia Wallace, Sauk Village, Illinois., and title agency owner Forrest C. Fawcett, Fort Lauderdale, Florida – previously pleaded guilty and admitted their roles in the fraud. They are awaiting sentencing.
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Rae Oliver Davis, Inspector General for the U.S. Department of Housing and Urban Development Office of the Inspector General, Douglas S. DePodesta, Special Agent-in-Charge of the Chicago Field Office of the FBI, and Kwame Raoul, Illinois Attorney General. The government was represented by Special Assistant U.S. Attorney Brian P. Netols and Assistant U.S. Attorney Erin Kelly.
“Mark Diamond repeatedly preyed on the elderly for years,” said Acting U.S. Attorney Pasqual. “He damaged the most vulnerable in our community, both financially and personally. We will continue to work with our law enforcement partners to hold accountable anyone who seeks to deceive elderly homeowners through fraud.”
“Diamond’s scheme defrauded more than 100 elderly and vulnerable homeowners, preying upon their trust and devastating them financially,” said HUD-OIG Inspector General Davis. “His sentencing today is a sobering reminder of the unique harm caused by predatory reverse mortgage schemes. These egregious criminal acts will not be tolerated, and my agency will continue to work with our law enforcement partners to hold other individuals like Diamond accountable for their actions.”
“The reverse mortgage fraud scheme perpetrated by the defendant preyed on some of the most vulnerable Chicagoans,” said FBI Chicago SAC DePodesta. “Combatting white-collar crime stands as a foremost priority for the FBI. With the assistance of our law enforcement partners, we will continue to investigate and dismantle financial fraud schemes aimed at harming members of our community.”
“Many of these victims were older homeowners who worked and saved their entire their lives, and their only mistake was trusting an individual who specifically targeted them to be victims of his scam,” said Attorney General Raoul. “My office is proud to partner with the U.S. Attorney for the Northern District of Illinois, the Department of Housing and Urban Development’s Office of Inspector General in Chicago, and the Chicago Field Office of the FBI to obtain a degree of justice for the victims who were defrauded. This sentence underscores the importance of the state-federal law enforcement collaborations that support my office’s work to hold accountable individuals who prey upon our most vulnerable residents.”
