Mohammad "Mike" Taghie Kakvand, the ringleader in a mortgage scheme that resulted in abandoned, crime-ridden Chicago apartment buildings, was sentenced Tuesday to nine years in prison.
Kakvand bought 33 apartment buildings in Rogers Park and on Chicago's South Side between 1997 and 2004, but didn't renovate them.
Units were sold as rehabbed condos at inflated prices, using straw buyers who defaulted on $29 million in loans.
The plot displaced renters, and left decaying buildings prone to squatters, drug dealers, fire and water damage.
Kakvand, 55, of Park Ridge, fled to Canada to escape arrest in 2004. He was arrested in 2005, and last year pled guilty to fraud. His sentence will include the 27 months he has already served.
"The damages caused not only to the lending institutions, but to the community, are immeasurable," said U.S. District Judge William Hibbler, who ordered Kakvand to pay $8.4 million in restitution.
Kakvand told Hibbler, "I know many people were harmed by my actions."
Also charged were Syed Ali Mohammed Razvi, a fugitive, and real estate appraisers Thomas M. Groh, Eric L. Dorsey and Britt J. Pierre, who earlier pled guilty.
Haggerty said Kakvand's continuing legacy is the reduction in the amount of affordable rental housing in Rogers Park, and the artificial inflation of area home prices.
"Rogers Park was always one of the most affordable communities," Haggerty said. "I don't think it is anymore."
Blognotes: I have so many blognotes on this story, I don't know where to begin. Stop back though-out the day. We'll be putting pieces of the puzzle together.
17 comments:
AIR LOANS: A swindler invents borrowers and buildings to obtain loans. The perpetrator may set up phones and pose as borrower, employer, appraiser and credit agency when the lender calls to verify.
CHUNKING: A swindler holds a seminar promising to show investors how to get rich buying property with no money down. Using the investors' personal information, the swindler submits multiple mortgage applications, pocketing the loan proceeds.
DOUBLE SALES: Weeks can pass between the filing of a property record and its appearance in computerized registries used by title-search companies. A swindler can record a deed, arrange a loan, and before those transactions show up in the computer, file another deed and arrange another loan.
HOME IMPROVEMENT CONS: A contractor talks the homeowner into making costly or unnecessary repairs. The contractor loans the homeowner money for the job or steers him to a mortgage lender, then has the loan proceeds sent directly to the contractor. When the loan forecloses, the contractor can end up taking the house or part of the sale proceeds from it.
LAND FLIP: Property is purchased, falsely appraised at a higher value, then quickly resold. Some properties are flipped three or four times between associates with no money changing hands.
STRAW OWNER: To apply for a loan, the swindler pays a person, often a friend or relative, for the use of his name and credit history.
Sources: Federal Financial Institutions Examination Council, FBI, Illinois attorney general, Cook County state's attorney's office.
Kakvand and his crew allegedly bought apartment buildings and then resold scores of individual units as condominiums, a common and seemingly legitimate business.
But rather than market the units, Kakvand's crew recruited straw buyers to pose as condo buyers.
For each supposed buyer, Kakvand companies prepared a separate bogus loan application, federal prosecutors allege.
More than 150 mortgage applications were submitted to dozens of lenders.
When the mortgages went unpaid, some lending companies queued up in foreclosure court, initiating a separate civil lawsuit to unwind each fraudulent loan.
The Kakvand crew's building in the 7600 block of North Greenview Avenue was "a free-for-all," former city attorney Elizabeth Vitell said in an interview.
Nothing but wall studs and exposed copper pipes separated some supposed condo units, Vitell found.
Drug dealers cruised the hallways.
What really gets me are the comments made by community activist (code for communist) Mary Jane Haggerty. According to her Rogers Park home prices are artificially inflated. Inflated? Home prices in Rogers Park should be off the charts, more so than any other neighborhood in Chicago. Thanks to Joe Moore and his concern for goose liver and big box ordinances, sufficient city services are rare in the neighborhood and gang bangers still run the streets. Thanks to Joe the big bucks have shied away from the rough and tumble Howard corridor or the mean street of Morse, instead leaving blue light big brother in it's wake. Who wants to invest in a community where prostitution and killings are rampant? We live on Lake Michigan! One of the most majestic and valuable resources in the world! People, investment and resources should be flooding in making Rogers Park the place to live, work and entertain. In turn making our property values on par with that of the Gold Coast and Lincoln Park. I'm not saying our small slice of paradise in this urban jungle should reflect the attitudes and image of those neighborhoods, but it would be nice to think that Rogers Park could reflect that housing market. But Haggerty would disagree and give us the same socialist rhetoric that Hillary Clinton would, raise taxes on those who have,so those who don't want to work can enjoy the same spoils. What a country. I'm happy to see "Mike" Taghie Kakvand get nine years for what he did but just think what this place could have been like if he did it the right way. By now we might have seen some flowers in those empty planter boxes that line Morse.
Can anyone point me to the neighborhoods on the south side that were affected?
Our neighborhood is an hour commute away from downtown, and it's a painful and time consuming process to get out of the city to any destination other than lincolnwood skokie or evanston. If you think it's going to be the equivalent of the gold coast you're crazy.
Commentnotes: I like living in a neighborhood where people who don't work in the financial sector can afford to own and live.
- David Terrell
"But Haggerty would disagree and give us the same socialist rhetoric that Hillary Clinton would, raise taxes on those who have,so those who don't want to work can enjoy the same spoils."
Loyola Beach Bum apparently drank the Reagan Rhetoric-Flavored Kool-Aid served to America's browbeaten dupes. He actually believes(implied) that Hillary Clinton will raise his taxes and give the money to a Cadillac-driving welfare queen with a 72 x 72-in. flat screen in her government subsidized apt.
Hey Loyola: Apparently you dont think that Bush's deep welfare-for-the-rich tax cuts have anything to do the volatility in the stock markets this week and the coming recession. If not, explain to me how those deep tax cuts got us to the state we're in, rather than a thriving economy with a strong dollar.
"But Haggerty would disagree and give us the same socialist rhetoric that Hillary Clinton would, raise taxes on those who have,so those who don't want to work can enjoy the same spoils."
What a dumbass thing to write and think. Using that logic, I can easily conclude that it must be Bush's deep tax cuts for the richest 1 percent of Americans that are responsible for our current stock market volatility and coming recession.
I don't beleive Clinton would give tax money to welfare moms driving Cadillacs, she has and so has her husband. Some coming recession, everyday Starbucks is packed with people plopping down $5 for a friggin coffee. Or a line around the block waiting to spend $1000 a plate on an Obama fund raising dinner. Why do liberals want to give everything they earn back to taxes? This will always boggle my mind. Oh I forgot liberal is another word for commie pinko!
Mary Jane Haggerty, housing action program director at the Rogers Park Community Council, said Kakvand's continuing legacy is the reduction in the amount of affordable rental housing in Rogers Park, and the artificial inflation of area home prices.
"Rogers Park was always one of the most affordable communities," Haggerty said. "I don't think it is anymore."
The official story: Shrinking affordable housing options in Rogers Park is due to Kakvand.
It has nothing to do with Moore's 2 decades of aggressive gutting of rental apartment buildings and tearing down of homes for luxury condos in return for campaign contributions.
Was Moore aware of these practices? Did he receive contributions from him? Why didn't he impose inspections on the properties? This has been the problem with Moore, just like Kakvand, he is an absentee landord!
Loyola Beach Bum sez: "I don't beleive Clinton would give tax money to welfare moms driving Cadillacs, she has and so has her husband."
Huh?
Loyola Beach Bum sez:"Some coming recession, everyday Starbucks is packed with people plopping down $5 for a friggin coffee. Or a line around the block waiting to spend $1000 a plate on an Obama fund raising dinner."
Read the papers, Loyola Beach Bum, if you can read at all. Starbucks is in BIG TROUBLE, and the one near you just might be closed in the coming year.
"Why do liberals want to give everything they earn back to taxes? This will always boggle my mind. Oh I forgot liberal is another word for commie pinko."
Maybe Liberals want the money to be spent on infrastructure, parks, libraries, crime prevention, early childhood care, and education (something Loyola Beach Bum, evidenced by his is poor writing, typing, and logic skills, is obviously adverse to).
Loyola Beach Bum can't even properly size up Hillary "Centrist" Clinton. Since when would a "commie pinko liberal" vote for the War (boondoggle) in Iraq, or in favor of sanctions against Iran?
Starbucks gained 1.42 a share today up 7% from yesterday. Down Jones up almost 300 points today. Just saying.
By the time Bush leaves office, the US will be a much, much poorer country. Funny . . . . that wasn't what the people who elected him were promised a la his tax cuts.
But if Hillary or Obama is elected president, Loyola Beach Bum will at least still have a scapegoat for his silly, simplistic, and lumpen proletariat view of the world.
MAKES ME WONDER HOW MUCH THESE FELLONS GAVE IN POLITICAK DONATIONS TO THE 49TH----
Billyjoe wishes Jimmy Carter was running for President
Let's just hope than Hillary or Obama DON"T get elected. That's one way to make this world a better place.
This type of fraud was prevalent all over the country, along with corrupt appraisals, "Liar" and NINJA (no income no job no assets)loans, and just plain bad lending with no idea of risk managment, just so lenders could pocket outrageous fees for high-risk loans for people anyone could see could not afford the places they bought.
It isn't just this neighborhood that watched prices ratchet out of reach to average-income buyers, while the rental supply shrunk, but every neighborhood in every price bracket.
We are all going to be paying for this rampage of fraud for a long, long time, probably up to ten years, in the form of hyperinflation, unbelievably tight credit, and lost jobs and opportunity as this mess will take 5 years at least to clean itself out, and another five years of bumping along the bottom.
Many more people will lose overfinanced homes than just those who bought in 2002-2006. Did you know that over one third of all homeowners, including those who had owned their homes for decades, refinanced them and pulled massive amounts of money out of them for things like outdoor kitchens and expensive cars? That means that 33% of homeowners are possibly underwater on their mortgages. Some were more prudent than others about how they borrowed.
I hope Kakvand and his ilk, along with the principals of the originating lenders who wrote these loans, the money managers who made 9-digit yearly bonuses buying this drek for their portfolios, the corrupt appraisers, the loan brokers who urged their customers to lie on their apps, and the buyers who bought what they knew damn well they couldn't afford, or took out money they had to know they could never pay back- I hope every damn one of these people swing for this.
That's right. Instead of bailing these people out, every one of them who lied flagrantly about his/her income on a loan app, or pursuaded a client to do the same, should be looking at fraud charges. So should the appraisors, so should officers of the lending firms, so should the managers at GNMA and FMNA who enabled this.
If you and I find ourselves standing in bread lines in a few years, with the unemployment at 20% and our dollar trading against the pound at a ratio of 20:1,and our pension funds in total collapse, you can thank Kavkand and his ilk for it, and all the scum all the way up the chain who enabled them all, including Dr. Greedscam, Bernanke, and their fellow loan-sharks at the Fed.
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