A man has been sentenced to more than three years in federal prison for orchestrating a mortgage fraud scheme in Chicago. The fraudulent activities resulted in financial institutions losing over $1.5 million.
Lee Holliday, aged 66 and residing in Schererville, Indiana, had previously pleaded guilty to a federal bank fraud charge. U.S. District Judge Sara L. Ellis sentenced him to three years and three months in federal prison.
Holliday admitted that he was involved in mortgage fraud during 2011 and 2012, related to purchasing multiple properties on the West and South Sides of Chicago. He recruited buyers and provided them with funds for down payments which were only 3.5% of the purchase price due to loans being insured by the Federal Housing Authority (FHA). Holliday collaborated with these buyers to purchase homes at inflated prices and shared the proceeds with both buyers and sellers. Despite promises that the properties would generate rental income, most buyers fell behind on their mortgage payments, leading seven properties into foreclosure proceedings. Overall, Holliday's actions caused lenders a loss of approximately $1.53 million through false loan applications.
Additionally, Holliday admitted involvement in Covid-relief fraud during 2020 and 2021 by unlawfully obtaining $391,869 in Paycheck Protection Program funds.
The sentence announcement was made by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, alongside Machelle L. Jindra, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development’s Office of Inspector General in Chicago. Assistance was also provided by the FBI Chicago Field Office. The government’s representation included Assistant U.S. Attorney Stephanie C. Stern and former Assistant U.S. Attorney Charles W. Mulaney.
“FHA loans are intended to help people who could not otherwise afford a home,” stated Acting U.S. Attorney Pasqual. “In this case, the money that was supposed to help those people and improve their neighborhoods instead went into the defendant’s pockets.”
“Lee Holliday repeatedly engaged in an egregious mortgage fraud scheme causing borrowers to falsely represent critical income and asset information to qualify them for loans they would not have otherwise qualified for,” said HUD-OIG SAC Jindra. “When people take advantage of HUD-insured mortgage programs, it limits opportunities for hard-working individuals trying to achieve the American dream of homeownership."
HUD-OIG plans continued collaboration with law enforcement partners "to investigate individuals who jeopardize the integrity of FHA mortgage programs.”