After an investigation conducted by the U.S. Department of Housing and Urban Development - Office of Inspector General, the Federal Bureau of Investigation and the Maryland Department of Labor, Licensing and Regulation - Division of Financial Regulation, a federal indictment was returned on December 8, 2009 against two loan officers employed at a mortgage brokerage in Annapolis, Maryland.

[Press Release]

From April 2006 to February 2009, James William Fox II, age 39, of Crofton, Maryland, and James Hooper Dan age 45, of Annapolis, Maryland are alleged to have identified potential victims who were unable to make the mortgage loan payments on their homes. Instead of “rescuing”the victims from foreclosure as promised, the defendants allegedly obtained new mortgage loans in their own names or in the names of “straw purchasers” at even higher monthly mortgage payments than the victims had originally been paying, stripped the properties of equity, falsified information on loan applications and failed to make the mortgage payments on behalf of the victim sellers as promised.

The properties were located in Waldorf, Capitol Heights, Baltimore, Silver Spring, Pasadena and Hagerstown, Maryland, as well as Glen Rock, Pennsylvania and Chesterfield, Virginia. As a result of the fraud scheme, Fox and Dan allegedly caused lenders to lose over $1.7 million in fraudulently obtained mortgage loans and caused the individual victims to lose over $650,000 in equity in their homes. The indictment seeks the forfeiture of the total loss of $2,350,000.

Dan and Fox face a maximum sentence of 20 years in prison for conspiracy to commit wire fraud and 20 years in prison for wire fraud.