A federal grand jury has indicted Jason Morales, a 44-year-old licensed mortgage loan officer from Chagrin Falls, Ohio, on six counts of bank fraud, U.S. Attorney Gregory W. Kehoe announced on Mar. 5. If convicted, Morales could face up to 30 years in federal prison for each count.
The indictment alleges that Morales orchestrated a mortgage fraud scheme targeting a financial institution by creating fake paystubs and employment documents for clients who did not work at the companies listed. These documents falsely showed that the clients had steady employment and sufficient income to qualify for mortgage loans.
According to prosecutors, Morales also altered legitimate bank statements and fabricated new ones to make it appear as though borrowers had enough assets to meet loan requirements. He then submitted these falsified documents to financial institutions during the underwriting process.
To further mislead lenders, Morales allegedly created websites for the fictitious companies and provided his own contact information as company executives. When lenders attempted to verify employment by phone or email, he impersonated company officials and confirmed false details about his clients’ jobs.
U.S. Attorney Kehoe said, “An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.” The case was investigated by the Federal Housing Finance Agency – Office of Inspector General, U.S. Department of Housing and Urban Development – Office of Inspector General, and the Federal Bureau of Investigation. Special Assistant United States Attorney Chris Poor will prosecute the case.
The outcome of this case may have implications for how mortgage fraud schemes are detected and prosecuted in the future.
