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The lure of the big hit combined with less stringent mortgage approval processes have lead to a rash of mortgage fraud across the country. Combine that with a hundred hucksters teaching the art of flipping homes has created an environment of fraud in real estate that is amazing. A group outside of Pittsburgh, Pennsylvania has been busted after committing 1.7 million in mortgage fraud.

Robert Lee Kohlman, 37, of Murrysville, pleaded guilty to bank fraud and income tax fraud. He faces between 33 and 41 months in prison and will be sentenced June 12 by Senior U.S. District Judge Maurice B. Cohill Jr.

Federal prosecutors claim Kohlman, Lavelle Snead, of East Liberty, and David Jackson, 44, of New Kensington, Westmoreland County, participated in bogus house sales for 27 properties in poor neighborhoods between 1998 and 2002. The men used straw buyers to submit fraudulent bank loan applications at inflated prices with overstated incomes and assets of the buyers. The buyers were paid kickbacks for their help.

Among the buyers was state police Trooper Thomas W. Henry, who pleaded guilty in December to a charge of conspiracy to commit money laundering. Henry is on disability leave from his job with the state police in Belle Vernon, Fayette County. He will be sentenced April 10.

via PittsburghLIVE.com.

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