(Published Thursday, June 7, 2007 11:51:10 AM CST)
A d v e r t i s e m e n t
By Mike Heine Gazette staff
At least 11 Walworth County properties connected to a real estate fraud scheme had "buyers" whose identities were stolen, according to federal court documents.
Another man was pressured into signing a document that indicated he was going to live in a home he never intended to buy, and another man was paid $3,000 for use of his identity to secure a mortgage loan, according to a federal search warrant affidavit.
Lake Geneva's James J. Lytle was the mortgage broker in the purported sale of 19 Walworth County homes, including his own, according to a plea agreement Lytle signed May 12. He and others conspired to falsify information and used the identities of others-real or fraudulent-to obtain home loans on properties that had their values inflated, according to the plea agreement.
Court documents indicate Lytle used someone's stolen identity to fraudulently "purchase" his home at W3645 Lortin Place, Lake Geneva, for $150,000 more than he paid for it three years earlier. He also continued to live and maintain an office in the house after the alleged sale, according to the affidavit.
James Lytle
To help secure the loans, Lytle made up employment and income histories for some of the buyers, according to the affidavit and his plea.
Lytle, 33, would make between $3,000 and $20,000 per sale and divvy the proceeds among those he conspired with, including the people whose identity he used and those who helped find the so-called straw buyers, or people listed as an buyer who never intend to live at the property, according to the plea.
Lytle is expected to enter a guilty plea to a single charge of wire fraud in federal court Wednesday, June 27. e is the only person charged, but other charges are expected, according to an FBI source.
The Janesville Gazette was unable to reach Lytle for comment.
"This is pending litigation with serious allegations and serious charges, and I am not in a position to comment at this time," said Jack Rimland, Lytle's defense attorney.
FBI agents and sheriff's deputies on Feb. 9, 2006, simultaneously searched seven locations in Walworth County that may have been tied, knowingly or unknowingly, to Lytle's alleged scheme.
Agents recovered real estate files, computer disks and computer systems from some of the locations, according to search warrant returns.
"We're continuing to evaluate evidence and evaluate this case," said Assistant U.S. Attorney Carol Kraft.
Kraft would not say if any of those whose homes or offices were searched are suspected of conspiring with Lytle.
Delavan attorney Jeff Hahn said he represents six people who had their identities used in the scheme.
One client applied for a loan with Lytle and was denied, Hahn said, yet the client was later served with foreclosure papers for a house he never knew he had because Lytle used his information to purchase it.
Another client had his driver's license presented at a property closing that had another man's picture copied onto it, Hahn said. That client never attended the closing meeting.
Other clients were renters who thought Lytle was their landlord and paid him rent but later had foreclosure papers served to them with the name of a another purported homeowner who was not Lytle, Hahn said.
Suspected properties Federal court documents and records in the Walworth County Register of Deeds Office indicate these properties were involved in fraudulent real estate transactions:
-- 105 Glenwood Drive, Delavan-Sold for $165,000 on June 17, 2004. Prior sale price was $45,000 on Feb. 11, 2003. A subsequent loan application for the property was prepared, but never executed, for someone who denies intending to purchase the property. Foreclosure on Sept. 1, 2005.
-- 532 S. Second St., Delavan-Sold for $138,000 on July 21, 2004. Prior sale price was $44,000 in 1999. Fake identity for purported buyer used at closing. Foreclosure on July 26, 2005.
-- 407 S. Second St., Delavan-Sold for $146,000 on Aug. 6, 2004. Prior sale price was $60,000 in 1992. Purported buyer told authorities he was paid $3,000 to attend the closing and sign purchase documents. Foreclosure on Sept. 1, 2005.
-- 950 Center St., Lake Geneva-Sold for $235,000 on Sept. 21, 2004. It is unclear if there was a previous sale of this property. False identification used in sale. Purported buyer denies purchase. Foreclosure on June 7, 2006.
-- 1159 County H, Genoa City-Sold for $167,000 on Oct. 29, 2004. Prior sale price was $98,000 on April 21, 2003. False employment information was included on loan application. Foreclosure on Jan. 24, 2007.
-- 1617 N. Lincoln Avenue, Lake Geneva-Sold for $330,000 on Nov. 19, 2004. Prior sale price was $209,000 on Aug. 12, 2004. Same stolen identity used for the purported buyer in the 523 S. Second St., Delavan, property. Foreclosure on Jan. 19, 2006.
-- 1577 N. Lincoln Ave., Lake Geneva-Sold for $242,000 on Dec. 6, 2004. Prior sale price was $159,000 on June 29, 2004. Man told authorities he was pressured into signing documents to say he lived at property even though he never intended to live there. Foreclosure on Jan. 5, 2006.
-- N7574 County O, Whitewater-Sold for $205,000 on Jan. 20, 2005. Purported buyer's identity was stolen to obtain loan.
-- 900 Inlet Shore Drive, Delavan-Sold for $300,000 on Jan. 27, 2005, and again for $330,000 on June 30, 2005. One purported buyer had identity stolen for purchase of property. Renters continued to pay Lytle rent after its alleged sale. Foreclosure on Feb. 21, 2006.
-- 904 Inlet Shore Drive, Delavan-Sold for $300,000 on Jan. 20, 2005. Stolen identity used to purchase 900 Inlet Shore Drive used to purchase this property. Foreclosure on Feb. 21, 2006.
-- 911 Grant St., Lake Geneva-Sold for $141,000 on March 30, 2005. Prior sale price was $120,000 in March 2004. Foreclosure on Dec. 9, 2005.
-- 897 W. Wisteria Road, Pell Lake-Sold for $163,000 on May 4, 2005. Prior sale price was $97,000 on March 25, 2004. Appraisal for property may have been for a different property.
-- 62 E. Walworth Ave., Delavan-Sold for $140,000 on May 13, 2005. Previous sale price was $27,000 in 1999. Purported buyer's identity was stolen. Foreclosure in May 2006. House has since been razed.
-- 1614 N. Geneva Avenue, Linn Township-Sold for $270,000 on May 27,2005. Previous sale price was $162,000 on Dec. 13, 2004. Stolen identity used at closing.
-- W3645 Lortin Place, Lake Geneva-Sold for $339,000 on Oct. 28, 2005. Previous sale price by Lytle was $189,000 on Feb. 13, 2002. Stolen identity used at closing. Lytle continued to live at the address at time of the search. Foreclosure on Feb. 13, 2007.
Locations searched
Federal court documents indicate federal agents and local police executed search warrants Feb. 9, 2006, at the following locations. It is unclear how the locations are connected to the investigation:
-- James Lytle's home at W3645 Lortin Place, Lake Geneva.
-- The home of Martin Valadez, 905 Phoenix St., Delavan. Valadez was a mortgage broker with Lytle at Lakeview Financial Services in Lake Geneva, according to the search warrant affidavit.
-- Lakeview Financial Services, 728 Wisconsin St., Lake Geneva.
-- Titan Real Estate, 400 Broad St., Lake Geneva.
-- The home office of James Begg III, an appraiser for Alexander and Associates, at 723 Aweogon Road, Fontana.
-- The home office of Tamara Knutson, an appraiser for Knutson Appraisal Service, at 2933 Elm. St., East Troy.
