Strongsville Man Gets Six Years in Prison for Mortgage Fraud

 Fred Loewinger of Strongsville has been sentenced to six years in prison and ordered to pay $1.4 million in restitution for mortgage fraud, according to County Prosecutor Bill Mason.

Loewinger pleaded guilty on Oct. 27 to 25 felony mortgage fraud-related offenses for his participation in financing the purchase of 20 houses with $1.4 million in fraudulent loans. Loewinger, 62, owned Fast Mortgage Services, Inc. and conducted his fraudulent activities as a licensed mortgage broker and loan officer.

This case was investigated by the Cleveland Office of the FBI in connection with their participation in the Cuyahoga County Mortgage Fraud Task Force.

Loewinger was the main defendant in a criminal enterprise that involved 13 co-defendants who assisted in financing homes in the Cleveland area. Loewinger pleaded guilty to one count of engaging in a pattern of corrupt activity, one count of money laundering, three counts of theft by deception, and 20 counts of tampering with records. He faced a maximum of 128 years in prison.

The fraudulent enterprise utilized three schemes to deceive lenders: loan application fraud in which Loewinger created false loan applications for lenders; a down-payment scheme in which the group would create bogus checks that made buyers believe the lenders had made down payments; and kickbacks to defendants upon closing the sale of the house.

The defendants also engaged in a scheme called “double HUD,” where the title company submitted fake settlement statements to the lender showing a higher purchase price, then created another set to the seller with the lower and actual purchase price.

 Loewinger orchestrated the criminal enterprise while he was a licensed loan officer and owner of both Fast Mortgage and MJL Processing, Ltd., Inc. He submitted the fraudulent loans to the lenders, arranged for bogus down payments and deposited kickback money into accounts with Fast Mortgage and MJL Processing.

The money was then distributed to other defendants, including Mitchel Petti, 38, of Sagamore Hills, who co-owned and operated Titles Etc., which fraudulently closed these loans.

Mason's office said 85 percent of these houses fell into mortgage or tax foreclosure.

 On Feb. 3, Petti was found guilty by the court, after a five-day trial, of 13 mortgage fraud-related crimes, including engaging in a pattern of corrupt activity, conspiracy, and money laundering. Titles, Etc. was also found guilty.

Petti was in charge of the daily operations of the business, which included closing and funding of these fraudulent loans.

Petti is the last defendant to be sentenced in this case. His sentencing is scheduled for March 14 before Judge Timothy McCormick.

The investigation was conducted by the Cuyahoga County Mortgage Fraud Task Force, which is composed of federal, state, and local law enforcement agencies. The director of the task force is a Sergeant of the Cuyahoga County Sheriff’s Office.