Aug 01, 2014 Mortgage
Reprinted from the News Herald FROM STAFF REPORTS
DETROIT – A Gibraltar woman faces up to 10 years in prison and a fine of up to $250,000 for her role
in a more than $100 million mortgage fraud scheme.
Nicole Lynn (Turcheck) Rothe33, will be sentenced by U.S. District Judge Julian Cook on July 26 after
pleading guilty to two charges of conspiracy to commit wire fraud.
The scheme’s ringleader, Ronnie Edward Duke, 45, of Fenton, pleaded guilty Thursday before Cook
and is facing 10 to 15 years in prison. He will be sentenced Nov. 15.
Rothe was one of eight co-conspirators from Michigan and Alabama who pleaded guilty. One was
sentenced to two years in prison; another was sentenced to five.
The scheme lasted for four years, ending in July 2007 when the FBI executed seven search warrants
‘in metropolitan Detroit and Florida.
The scheme involved more than 500 fraudulent loans, more than 100 “straw” buyers and about 180
residential properties, many of which went into default and foreclosure, according to the U.S.
Attorney’s Office. Loans ranged from about $350,000 to $600,000.
The scheme involved “real” and “ghost” loans, according to the U.S. Attorney’s Office. “Real” loans
were closed through legitimate title companies, and deeds and mortgages were properly recorded at
county registers of deeds. Authorities said they were fraudulent because the borrower described in
the loan was not the true borrower, but instead was a “straw” buyer with a good credit history who
was recruited to participate for a fee. Down payments came from money in the scheme, and the straw
buyers’ accounts were artificially inflated by the temporary transfer of money into those accounts.
Their income also was inflated.
The “ghost” loans were secured using the properties secured by the “real” loans, authorities said,
adding that the purchase agreements and other closing documents were counterfeit, and no
legitimate title companies were involved. The warranty deeds and mortgages in the ghost loans were
unrecorded, meaning that they were unsecured.
Authorities said the defendants used the scheme’s proceeds to make monthly payments on loans to
keep the scheme going, to make down payments on the real loans, to pay participants in the scheme,
to finance unrelated businesses and to purchase luxury items such as a helicopter, cars, boats,
residential properties and foreign vacations.
Rothe was accused of working as a mortgage broker and loan officer for several companies, including
All Fund, Amerifund and Aapex Mortgage. She processed fraudulent loan applications on behalf of
straw buyers and recruited them. Authorities said she paid straw buyers $5,000 per transaction and kept $10,000 each for herself. The complaint did not say how many straw buyers she recruited. The U.S. Secret Service assisted the FBI in the
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