COLUMBUS, OH – May 19, 2010 – (RealEstateRama) — In a case symbolic of the nation’s foreclosure crisis, a mortgage broker was sentenced today in Cuyahoga County for orchestrating a mortgage fraud scheme that involved $5.8 million in bogus loans and 78 homes in Cleveland’s Slavic Village.Mark Kellogg, 39, of Shaker Heights was sentenced to 14 years in prison and was ordered to pay restitution of $5,831,500 to lenders. Kellogg previously pleaded guilty to more than 100 separate charges including money laundering, theft by deception, engaging in a pattern of corrupt activity and tampering with government records.
“Prosecutors in this case were able to connect the dots and demonstrate at sentencing how specific loans from Cleveland homes, including those in Slavic Village, were bundled into securities and sold on Wall Street,” said Attorney General Richard Cordray. “Those securities were marketed as highly-rated, low-risk investments. In fact, with a foundation in false promises and mortgage fraud, these kinds of securities were destined to fail and ultimately contributed to the collapse of the nation’s housing and credit markets.
“I applaud the work of the Cuyahoga County Mortgage Fraud Task Force and Cuyahoga County Prosecutor Bill Mason in this case. While no amount of jail time can heal the wounds inflicted on our communities, today’s sentencing should reaffirm our message that we will investigate and prosecute evidence of mortgage fraud to the fullest extent of the law.”
Since taking office as Ohio Attorney General in January 2009, Cordray has taken a tough stance on fighting foreclosure, financial predators and unscrupulous business practices. He has filed groundbreaking lawsuits against three mortgage servicers and nine lawsuits against foreclosure rescue scam companies to help protect Ohio homeowners.
Additionally, Cordray is fighting to hold Wall Street banks and executives accountable for their wrongdoing. He has pursued eight major cases against Wall Street firms: AIG, Bank of America, Fannie Mae, Freddie Mac, Marsh, Merrill Lynch, the rating agencies and United Health Care. So far, more than $2 billion has been recovered.
The Ohio Attorney General’s Office, through its Special Prosecutions Unit and the Ohio Organized Crime Investigations Commission, supports the work of five mortgage fraud task forces around the state.