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Chicago Businessman Mark Steven Diamond Guilty of $6M Reverse Mortgage Scam
CHICAGO — In a brazen scheme targeting vulnerable elderly homeowners, Chicago businessman Mark Steven Diamond, 67, pleaded guilty to a federal fraud charge for bilking homeowners out of millions in a home repair and reverse mortgage scam.
Diamond, a Chicago resident, schemed with others to induce homeowners to unwittingly obtain reverse mortgage loans to pay for purported home repairs that Diamond offered to perform. The co-schemers targeted elderly victims based on the amount of equity in their homes and their relative lack of financial sophistication.
According to court documents, Diamond and his cohorts concealed from the homeowners that they were applying for reverse mortgage loans by falsely representing that they needed to sign certain documents to start the repair work. In reality, the documents were related to applying for the loan. After the loans were approved and originated by co-schemers, Diamond fraudulently pocketed the loan proceeds and often failed to perform any repairs.
Diamond’s guilty plea was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, who stated that Diamond victimized at least 18 Chicago-area homeowners by fraudulently obtaining approximately $929,000 from financial institutions in the form of reverse mortgage loan proceeds. The government will argue that there were at least 80 victims and that Diamond’s actions caused at least approximately $6 million in losses.
The guilty plea is a significant blow to the scheme, which involved four co-schemers, including loan originators Gary Bohn, Matthew Feferman, Diamond’s employee Cynthia Wallace, and title agency owner Forrest C. Fawcett. All four have previously pleaded guilty and are awaiting sentencing.
U.S. District Judge Franklin U. Valderrama set Diamond’s sentencing for September 4, 2024. Diamond faces up to 30 years in federal prison for the wire fraud charge. The government is represented by Special Assistant U.S. Attorney Brian P. Netols and Assistant U.S. Attorney Erin Kelly.
The case is a stark reminder of the importance of protecting vulnerable homeowners from financial predators. The Illinois Attorney General’s Office provided substantial assistance in the investigation, which was led by the U.S. Department of Housing and Urban Development’s Office of Inspector General and the FBI’s Chicago Field Office.
Key Facts
- State: Illinois
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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