From the U.S. Attorney:
Man Sentenced to More Than Three Years in Federal Prison for Orchestrating $1.5 Million Mortgage Fraud Scheme in Chicago
CHICAGO — A man has been sentenced to more than three years in federal prison for orchestrating a mortgage fraud scheme in Chicago that bilked multiple financial institutions out of more than $1.5 million.
LEE HOLLIDAY, 66, of Schererville, Ind., pleaded guilty last year to a federal bank fraud charge. U.S. District Judge Sara L. Ellis on Friday sentenced Holliday to three years and three months in federal prison.
Holliday admitted in a plea agreement that he engaged in mortgage fraud in 2011 and 2012 in connection with the purchase of multiple properties on the West and South Sides of Chicago.
Holliday recruited buyers and provided them with funds for the down payments, which were only 3.5% of the purchase price since the loans were insured by the Federal Housing Authority.
Holliday worked with the buyers to purchase homes at inflated prices and then split the proceeds with both the buyers and sellers.
Although Holliday promised the buyers that the properties would provide rental income, the promises proved to be false and most buyers eventually fell behind on their mortgage payments.
Seven properties went into foreclosure proceedings. In all, Holliday caused the lenders to lose a total of approximately $1.53 million through the submission of false and fraudulent loan applications.
In addition to the mortgage fraud scheme, Holliday also admitted in his plea agreement that he engaged in Covid-relief fraud in 2020 and 2021, fraudulently obtaining $391,869 in Paycheck Protection Program funds to which he was not entitled.
The sentence was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, and Machelle L. Jindra, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development’s Office of Inspector General in Chicago. Valuable assistance was provided by the FBI Chicago Field Office. The government was represented by Assistant U.S. Attorney Stephanie C. Stern and former Assistant U.S. Attorney Charles W. Mulaney.
“FHA loans are intended to help people who could not otherwise afford a home,” said Acting U.S. Attorney Pasqual. “In this case, the money that was supposed to help those people and improve their neighborhoods instead went into the defendant’s pockets.”
“Lee Holliday repeatedly engaged in an egregious mortgage fraud scheme causing borrowers to falsely represent critical income and asset information to qualify them for loans they would not have otherwise qualified for,” said HUD-OIG SAC Jindra. “When people take advantage of HUD-insured mortgage programs, it limits opportunities for hard-working individuals trying to achieve the American dream of homeownership. HUD-OIG will continue to work with the U.S. Attorney’s Office and our law enforcement partners to investigate individuals who jeopardize the integrity of FHA mortgage programs.”
