CHICAGO (CBS) — A South Holland man is going to prison for 17 years for running a mortgage fraud scam that cost lenders about $16 million.
Kenneth Steward, 45, formerly of South Holland, was sentenced Wednesday to 17 1/2 years in federal prison, according to the U.S. Attorney’s office. He pleaded guilty in June to 16 counts of wire fraud, bank fraud and mail fraud.
From 2004 to 2008, Steward orchestrated the fraudulent purchase and resale of dozens of houses in the Englewood, Roseland and Back of the Yards neighborhoods. He was responsible for about 109 fraudulent transactions, causing lenders to issue nearly $27.8 million in loans and lose more than $14.5 million.
Stewart allegedly used straw buyers to fill out false documents and obtain loans for homes, and took kickbacks from every transaction, according to the federal indictment against him. He also controlled about $3.1 million in post-closing funds, prosecutors said.
At least 74 of the 109 South Side houses caught up in Steward’s scheme ended up in foreclosure, prosecutors said.
He was also part of a larger scheme that involved a total of 122 homes, and caused losses of about $16 million.
Despite almost no prospect of recovery, U.S. District Judge George Lindberg ordered Steward to pay more than $13.1 million in restitution and indicated he would enter a preliminary forfeiture judgment of $35 million, the release said.
“Steward accomplished a wide-ranging fraud scheme that caused massive losses to lenders and blighted communities because many of the properties … have been abandoned or are in poor condition,” prosecutors said prior to sentencing.
Six others were indicted in the case, but have yet to go to trial or plead guilty.
Steward was previously charged with mortgage fraud in 2003, and was charged with aggravated unlawful use of a weapon in 2009, the Chicago Tribune reported.
He was also featured in a 2005 Tribune report on mortgage fraud, which said he presented himself as a financial adviser to homeowners in danger of foreclosure, but ended up taking out loans on his victims’ homes without their knowledge. Many homeowners ended up being evicted because they couldn’t pay back the loans Steward took out, the Tribune reported.