Federal prosecutors in Kansas City on Wednesday claimed a first-in-the-nation indictment against people who supply information used to build fake credit histories.
Credit history fraud is a growing criminal trend across the country, prosecutors said. In this case, it was unearthed "operating in the shadows" of a more traditional mortgage fraud scheme.
In the federal grand jury indictment returned Wednesday, two people were accused of conspiring in a large-scale scheme to help others buy expensive houses in Lee's Summit by using phony credit reports and stolen Social Security numbers.
A California real estate agent and a Florida businessman allegedly supplied the false information to three others, including two Kansas City area men, to falsely obtain nearly $3 million in mortgage loans.
The fake credit histories enabled those three people to buy six residential properties in Lee's Summit priced from $418,000 to more than $600,000, according to the indictment.
"Credit history fraud is a new and troubling criminal scheme," said Beth Phillips, U.S. attorney in Kansas City.
According to the indictment, Karen Washam-Hawkins, 48, of Carson, Calif., allegedly sold stolen Social Security numbers that others used to help create false credit histories.
Gerald William Bartlett, 38, of Tampa, Fla., was accused of providing false information to credit bureaus to enhance the credit-worthiness of those seeking to obtain loans.
They were charged in the six-count indictment with conspiracy and wire fraud.
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