A Long Island man, Brent Kaufman, pleaded guilty this week to stealing $4.7 million in mortgage refinancing proceeds that were meant to pay off the existing mortgages of his clients. Kaufman was an unlicensed mortgage broker and assisted clients in Queens and Long Island with refinancing their mortgages.
Instead of using the lender proceeds, which were to be wired to satisfy existing liens, Kaufman, along with others not yet named, engaged in a scheme to defraud Home Point Financial Corporation, Loan Depot, United Wholesale Mortgage, and other mortgage lenders by providing lenders with false wire routing information.
Instead of wiring the funds to the correct financial institutions, the funds were instead transferred to bank accounts controlled by Kaufman. As a result, the existing mortgages were not paid off—leaving clients with two mortgages on their homes—and Kaufman stole the funds for his own personal use.
Kaufman faces up to 30 years in prison for his role in the mortgage closing fraud scheme.
Lenders must verify wire instructions as a component of appropriate compliance and overall operational risk management protocols. Failure to verify wire instructions can lead, as in this case, to catastrophic losses.
Secure Insight was the first industry company to address wire fraud risk, and since 2012 has vetted more than 175,000 trust accounts and more than 80,000 closing agents. Our clients have closed more than 14 million loan transactions without a loss.
Contact us at firstname.lastname@example.org to learn how you can subscribe to our fraud prevention service for as little as a few dollars per transaction. If you are using CoreLogic’s Loan Safe product you can get our risk assessments, called SARA, as a part of that report. If you are a Lender’s One member, ask your representative how you can benefit from an L1 discount to receive our services. All reports are integrated into your LOS system for ease of use.