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Chicago Lawyer Convicted in Mortgage Fraud
   

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.

 



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What on earth did a judge think she could to do  that would be of any earthly service to her community,

Sad to see, though, when someone derails.

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I prefer that folks who commit frauds involving hundreds of thousands of dollars to be doing community service in chain gangs, not as free citizens.  I do not know why first time offenders are given such a break, when the crimes involve such a large amount of money.  It's almost surprising that Bernie Madoff did not get probation and community service.

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I dislike community service sentencing, because it takes paying jobs away from people and business that should get a fair wage for doing them. 

Community service is great for nonprofit organization who are self-organizing and willing to go out and provide good civic work, but a captive system where a wrong-doer is given the opportunity to gain by earning prison credits while taking work away from honest citizens is wrong.

I've even said this about the elderly volunteers who do weddings at the local County Clerk's office;  they take money from the wedding planning industry and ministers who could and would otherwise offer their services in this capacity. 

The bride and groom get a free volunteer to perform a ceremony;  something that they could get a friend to do for free, online with the Universal Life Church and a home ceremony in their own living room. 

Anyway, debtors prisons ftw!

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If a person walked into a bank and stole hundreds of thousands of dollars, that person would go to prison. Unfortunately, people who do the same thing wearing a suit and sitting in an office often get a pass. It is still theft...of alot of money that could be used to aid other businesses and employees that are following the rules. It is also more egregious because it is an abuse of trust, which impacts the whole profession/industy. Unequal penalties send the wrong message. In the broad view of things, this type of disparate treatment has socio-economic implications as well. Seeing another person derail is never a good thing. However, I think harsher sentences and publicized scrutiny of these type of crimes are good. In my experience with prosecuting white collar criminals, the motive is not addiction--rather it is almost always plain greed--supporting a lifestyle on the backs of hard-working citizens. I agree with Slade--make them get a job but force them to go to work everyday in an orange suit with "Inmate" written on the back. They are no better or more entitled than any other criminal in the system.

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