A former loan originator has pleaded guilty to scamming Chicago-area homeowners in a
Mark Steven Diamond, 67, faces up to 30 years in prison after pleading guilty Tuesday to a wire fraud charge for his role in scamming elderly homeowners. The onetime LO, who was barred from originating loans 20 years ago, worked with brokers to scam over a dozen residents out of reverse mortgage proceeds to pay for shoddy or nonexistent home repairs.
According to the plea agreement in an Illinois federal court, Diamond admitted to defrauding 17 victims from ages 62 to 97 out of $839,000 in reverse mortgage funds. Feds claim the scheme included at least 80 victims.
Diamond, who remains in custody, faces up to 30 years in prison, and prosecutors have recommended a sentence of up to 24 years. He'll be sentenced in September, while four other co-schemers who've also pleaded guilty await sentencing.
Attorneys for Diamond didn't return requests for comment Thursday.
The defendant was a licensed loan originator in Illinois and president of brokerage OSI Financial Services, along with home repair contractor firm United Residential Services, in Chicago. The same Illinois federal court previously barred him and OSI from originating loans in 2003.
Beginning in 2006, Diamond employed Cynthia Wallace, of Sauk Village, Illinois to solicit homeowners in the West Side of Chicago, a predominantly African-American neighborhood with older homes that largely weren't refinanced.
Over the next nine years, the pair convinced homeowners, many with a lack of financial understanding, to undertake home repairs, which they presented as costing near the total of each homeowner's anticipated equity. The duo, in accordance with separate mortgage brokers, took out reverse mortgage loans in homeowners' names, falsifying documents and representation to both customers and financial institutions to push the transactions forward.
The broker co-defendants worked for American Fidelity Financial Services and Illinois-based Harbor Financial Group, according to the plea agreement. An Illinois regulator revoked Harbor's residential mortgage license in 2010 over its arrangement with Diamond.
The nation's senior population holds a
