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November 20, 2003
Five Charged in
Boone County Mortgage Fraud
Thomas J. Kneir,
Special Agent In Charge of the Chicago office of the Federal Bureau of
Investigation (FBI); Barry McLaughlin, Special Agent in Charge of the
Chicago Office of Inspector General (OIG) for the Department of Housing
and Urban Development (HUD) and Patrick J. Fitzgerald, U.S. Attorney for
the Northern District of Illinois, announced today the November 18, 2003
indictment of five individuals by a Federal Grand Jury in Chicago.
This indictment involves a mortgage fraud scheme associated with the sale
of single family homes in the Candlewick Lakes subdivision, which is a
gated housing community located north of Belvidere, Illinois, in rural
Boone County.
The individuals charged in this indictment are identified as GORDON L.
NELSON, age 66, of Florida; JAE HORN-GERBER, also known as Jae Rank, age
53 of Hilton Head, South Carolina; ALFREDO F. BUSANO, age 40, of Elgin,
Illinois; LINDA S. MARTZ, age 49, of Poplar Grove, Illinois and MARCOS
REYES, age 34, of Belvidere. Federal violations alleged in the indictments
include multiple counts of Mail Fraud, False Statements and false reporting
associated with HUD and Federal Housing Administration (FHA) transactions
and aiding and abetting a federal violation.
At the time of the alleged offenses, Nelson was the owner and president
of Lifetime Homes, Century Homes and Builders Funding Corporation, all
of which were businesses located in Belvidere, Illinois. Horn-Gerber was
a licensed real-estate broker and was at various times associated with
Nelson's businesses. Martz was employed as an expediter and closer for
Century Homes and Builders Funding. Busano was employed as a loan officer
and manager of the Anchor Mortgage Corporation's branch office in Elgin,
Illinois. Reyes was associated with the Anna M. Corporation.
The indictment alleges that Nelson, Horn-Gerber, Martz and Busano and
others, participated in a scheme to defraud and to obtain funds and property
from HUD and Anchor Mortgage, through false and fraudulent pretenses,
representations and promises. This scheme caused Anchor Mortgage to issue
loans insured by HUD/FHA totaling in excess of $3,200,000 for approximately
28 Candlewick properties. Several buyers subsequently defaulted on the
fraudulently obtained HUD/FHA insured loans causing losses to HUD in excess
of $650,000.
A separate indictment alleges that Reyes and his company provided funds
for the purpose of assisting in the obtaining of a HUD/FHA insured loan
from Anchor Mortgage and falsely represented the origination of these
funds.
Those charged in the indictment will appear before a United States Magistrate
Judge in Chicago, on a date to be determined. If convicted of the charges
against them, the defendants in this case face a possible sentence of
up to 5 years incarceration and a fine of up to $250,000 on each count
of mail fraud.
This case was investigated jointly by FBI Chicago's Rockford Resident
Agency, located in Rockford, Illinois and HUD/OIG.
The public is reminded that an indictment is not evidence of guilt and
that all defendants in a criminal case are presumed innocent until proven
guilty in a court of law.
EDITOR's NOTE: A copy of the indictment returned in this case is available
from the Rockford, Illinois FBI Office at (815) 987-9833.
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