Federal prosecutors have uncovered a major housing fraud operation involving two Philadelphia men who repeatedly traveled to Minneapolis to carry out a scheme that caused millions of dollars in losses. The case underscores growing concerns about organized financial crime targeting housing programs and lenders.
According to the U.S. Department of Justice, the defendants orchestrated a housing fraud scheme between 2018 and 2022 that resulted in losses estimated between $3 million and $5 million. Prosecutors say the men used straw buyers, falsified loan applications, and fraudulent documents to obtain mortgage loans for residential properties in Minnesota. The properties were primarily located in the Minneapolis area, while the suspects were based in Philadelphia.
The DOJ stated that the defendants made multiple trips from Pennsylvania to Minnesota to manage transactions, recruit participants, and coordinate property purchases. Loan applications allegedly included false employment information, inflated income figures, and misrepresentations about buyers’ intent to occupy the homes as primary residences. Once the loans were approved, the defendants allegedly diverted proceeds for personal use.
Federal authorities charged the men with conspiracy to commit wire fraud, wire fraud, and other related offenses. Each charge carries the potential for significant prison time if convicted. The case is being prosecuted by the U.S. Attorney’s Office, with assistance from federal investigators focused on financial crimes and housing fraud.
Officials emphasized that mortgage fraud drives up housing costs, harms lenders, and undermines trust in the financial system. The DOJ said schemes like this also place additional strain on legitimate homebuyers, particularly families trying to enter an already tight housing market.
The case reflects a broader federal effort to crack down on organized fraud rings that exploit lending systems for profit. Prosecutors said enforcement remains a priority, especially as housing affordability continues to challenge working Americans.
