A federal jury has convicted a disbarred Chicago lawyer this week for her role in a multi-million dollar mortgage fraud scheme. Lorie Westerfield, 46, was found guilty on three counts of wire fraud and faces up to 20 years in prison and a $250,000 fine on each count.
Westerfield, a title attorney licensed to sell title insurance for Attorney's Title Guaranty Fund in Illinois, acted as a real estate attorney and closing agent in fraudulent transactions that she knew were fraudulent sales.
Westerfield was one of 12 individuals charged as co-conspirators in a mortgage fraud ring that conducted fraudulent transactions on 17 Chicago-area homes and defrauded lenders of over $3.2 million.
The scheme was orchestrated by defendant Freddie Johnson, who recruited the other participants in the scheme. Co-conspirators, using stolen identities, posed as buyers and sellers and their agents during staged real estate closings, duping lenders into issuing loans on properties that the perpetrators did not own. No actual home purchases took place. At closing, Johnson pocketed the loan money and paid off his co-conspirators, including Westerfield. With the co-conspirators having no intention of ever making payments, the mortgages quickly went into default.
Westerfield was the only one of the 12 who did not plead guilty. Johnson and three other co-defendants testified as government witnesses at Westerfield’s trial.
Westerfield had already been disbarred in 2008, thanks to an unrelated federal bankruptcy fraud conviction involving a separate mortgage fraud.
In that case, Westerfield convinced two bankruptcy clients who faced foreclosure of their homes to sell their homes to her, promising to them that they could lease back the homes from her and would be given the option to repurchase their homes at a future date. Westerfield then obtained mortgage loans for a total of over $270,000 on the property, using false representations of the nature of the transactions in order to obtain the loans. Westerfield subsequently defaulted on her payments on both loans. When Westerfield filed a bankruptcy petition on behalf of one of those clients a few weeks later, she falsely represented that the debtor had not transferred any property within the year prior to the filing of the bankruptcy petition.
Westerfield got five years probation in that case and was ordered to pay restitution and perform community service.