Two men have recently pleaded guilty during separate appearances before the District Court in the Eastern District of Wisconsin. The guilty plea’s are the result of an investigation by the FBI who are continuing their enquiries.

On May 15, 2007 Lake Geneva mortgage broker James J. Lytle pleaded guilty to an information which accused him of using straw borrowers and falsifying information in connection with mortgage loans taken on at least 19 properties in Walworth County, WI. Click here for the information and then here for the Plea Agreement

Lytle’s plea agreement states that he fabricated the identity and creditworthiness of the borrowers and by inflating sales prices he made between $3,000 and $20,000 per transaction when swindling eight mortgage lending companies out of about $4 million.

On June 20, 2007 Jose Valadez agreed to plead to a single count of wire fraud for using another man’s identifying information and acting as a straw buyer in the sale of a home, in a $300,000 loan brokered by Lytle. Click here for the information and then here for the Plea Agreement.

Valadez was paid $1,500 to pose as someone else at the closing of a loan taken on 900 Inlet Shore Drive, Delavan. He used a falsified WI identification card to prove his identity. No payments were ever made on the mortgage.

Mike Heine at the Janesville Gazette reports that “FBI agents searched Valadez Furniture on Feb. 19, 2006, seeking employment records, W-2 forms and correspondence between the owners, managers or employees of the furniture store and Lake Geneva mortgage broker James J. Lytle, according to the search warrant.

The FBI agent who led the investigation believes Jose Valadez owns the store, according to the search warrant affidavit. People at Valadez Furniture are suspected of providing false information to verify employment of several home buyers, whose names were used in fraudulent real estate transactions, according to the affidavit.”

According to his plea agreement Valadez is co-operating with the investigation into other people connected to the case.

Update on Monday, March 16, 2009 at 6:56AM by The Editor - Ian Shuter - ACFE, DMS

Lytle pleaded guilty in 2007 and is serving a seven-year sentence for masterminding one of the largest mortgage fraud schemes in Wisconsin history. A top state banking regulator says Lytle probably never should have received a broker’s license.

Valadez, who also pleaded guilty to mortgage fraud charges in 2007, was sentenced to six years in prison. He kept his broker’s license until it expired, about six weeks after he agreed to plead guilty.

Update on Thursday, August 27, 2009 at 9:05AM by The Editor - Ian Shuter - ACFE, DMS

On August 19, 2009 John Boumenot entered a guilty plea in relation to a Criminal Information which charged him with fraud in relation to his part in the wider scheme.

He has admitted selling three properties to straw buyers and helping obtain fraudulent mortgage loans for those borrowers.

The properties mentioned in the Information are:

900 Inlet Shores, Delavan, WI
904 Inlet Shores, Delavan, WI
7574 County Highway O, Whitewater, WI.

Additional Materials

• Criminal Information
• Plea Agreement