Woman arrested as police gear for spate of mortgage fraud

A local escrow officer was arrested Tuesday in the theft of $568,000 from a lending company's home-sales transaction, and Las Vegas police highlighted the case as a prime example of a growing problem with mortgage fraud.

The arrest of Sheila Katherine Williams, 45, is the biggest to date for the department's financial crime section, but it soon might be eclipsed by the detention of others trying to profit illegally from the many parties involved in buying and selling homes in a strained market, police said.

All of the approximately 30 officers working in the section were trained recently to investigate mortgage fraud because the number of those cases is increasing so dramatically, said Lt. Bob Sebby. He attributes the avalanche of cases to the foreclosure crisis in Southern Nevada.

Sebby said the financial crimes section had received more than 100 complaints within the past six months that are in being investigated as possible mortgage fraud cases.

"Our phones are ringing off the hook," Sebby said.

At a news conference Wednesday afternoon, police did not provide many details about Williams' case. They would not disclose what company she worked for and said they did not know what Williams planned to use the stolen money for.

Sebby said the transaction for which Williams was arrested did not involve a foreclosed home. Police said the fraud was committed during the process of money being exchanged through a title company to the organization handling the escrow.

Police investigated the case for six months, they said.

Sebby said the real estate business can be ripe for mortgage fraud, especially with so many types of workers in involved in the trade -- lenders, brokers, appraisers, credit repair companies and escrow officers. He said victims of fraud can run the gamut from buyers and sellers to companies acting as middlemen.

Sebby said he has no doubts that many Las Vegas Valley residents facing foreclosures are being scammed by criminals.

"We're number one in foreclosures, and a lot of that is going to come back to being fraud," he said.

Sebby said that because of the caseload increase, Las Vegas police will be sending in undercover agents when they get tipped off to potential home sales scams.

Secretary of State Ross Miller said that over the past year, seven officers in the security division of his agency have been investigating mortgage fraud in which more than $1 billion is alleged to have been stolen.

"We're almost at capacity for the number of investigations we're looking into," he said.

"It's really hindered our ability to go after traditional security cases."

Unfortunately, Miller said, "The number of foreclosures we see in Las Vegas attracts a lot of con artists who want to prey on people in tough times."

Before the foreclosure crisis hit the Silver State, the security division received an "insignificant amount of complaints" in the past several years, Miller said.

The high number of investigations now has his office working as much as possible with the FBI and the attorney general's office in trying to solve the cases.

Miller said home buyers need to be aware of the mortgage scams out there. He warns the public to beware of buyers who don't want to conduct the purchase through a licensed real estate broker and people who don't want to work with a title company.

Sebby recommended that buyers and sellers check the credentials of parties with whom they are conducting business. Those checks can be made through the state's Consumer Affairs Division and the attorney general's office.

Contact reporter Antonio Planas at aplanas@reviewjournal.com or (702) 383-4638.