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Title Agency Owner Among Four Indicted in Ohio Fraud Conspiracy
   

A Hilliard, Ohio title agent and her husband are among four individuals who have been indicted in an alleged $7 million mortgage and short sale fraud conspiracy in the Columbus, Ohio area.

Deborah L. Kistner, 49, owned and operated Premiere Title in Hilliard, and allegedly used the business to facilitate the fraudulent transactions, many of which involved Kistner, her husband, or a sham business under their control as a buyer or seller.  Also indicted were Mark A. Kistner, 50, Deborah's husband; Philip H. Ennis, 36, an employee of Premiere Title who allegedly handled fraudulent transactions; and Jaime L. Smith, 42, who allegedly acted as a mortgage broker on some fraudulently obtained loans.

According to prosecutors, a typical fraudulent transaction would involve the Kistners purchasing a property, usually a newly built home in a suburban development using Mark Kistner's name and inflated financial credentials and other misrepresentations. 

Using Deborah's title company to close the transaction, dual settlement statements were typically created to hide from lenders the fact that significant kickbacks were paid to the Kistners or a sham company under their control from loan proceeds at closing.  The kickbacks would either be labeled on the lender version of the settlement statement as a finder's fee or would be omitted altogether.  The kickbacks would range from a little over ten thousand dollars to over a hundred thousand dollars.

The Kistners and their co-conspirators allegedly engaged in at least six transactions of this type from 2006 to 2008, according to the indictment.

In 2009, the Kistners allegedly switched over to short sale fraud.  A co-conspirator not named in the indictment would allegedly approach homeowners who were behind on their mortgages, offering to buy the home in a short sale.  The same co-conspirator would then negotiate with the lender for a short sale, representing that he was acting on behalf of investors-- disguising the fact that he was in fact the purchaser. 

The actual purchaser in these transactions was allegedly a sham "investor trust" set up by and under the control of the Kistners.  The Kistners would typically put up half the money for these transactions and the unnamed co-conspirator put up the other half. 

According to the indictment, even while the short sale price was being negotiated, there was often already a prearranged buyer for the property at a higher price.  This buyer was often deceived into believing that he was buying the property directly from the distressed homeowner. 

Deborah Kistner, through her title company, allegedly prepared the documents for these transactions, hiding from lenders the true nature of these transactions, including her involvement in the investor trust and the fact that there were buyers willing to pay more than the arranged short sale price at the time of the short sale.

The Kistners and their co-conspirators allegedly  pocketed the difference in price between the fraudulent short sale and the sale to the pre-arranged buyer.

Using this recipe, the Kistners and their co-conspirators repeated short sale frauds at least four times in 2009 and 2010, according to the indictment.

 



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