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Family Arrested in $3.8 Million ‘Land Flip’ Scheme

9/20/2001

TALLAHASSEE – A Miami couple and their daughter are facing numerous felony charges for organizing possibly the largest "land flip" and mortgage fraud scheme ever uncovered in South Florida. According to Department of Insurance fraud investigators, a series of fraudulent land-buying deals scammed at least eight South Florida mortgage lenders out of more than $3.8 million.

The arrests, made last night and this morning, are the culmination of an 18-month investigation by department investigators, said Florida Treasurer and Insurance Commissioner Tom Gallagher. The department became involved because the scheme relied on at least one title insurance agent and involved fraudulent title insurance documents. The Office of Statewide Prosecution, under Statewide Prosecutor Melanie Ann Hines, is handling the prosecution.

An illegal "land flip" involves the sale of real property from a purported legitimate seller to an "interim buyer" to then a "straw buyer." All of the fraudulent property deals uncovered as part of this investigation so far have resulted in foreclosure proceedings.

"This scheme has had a direct negative impact on mortgage lenders in Miami-Dade County," Gallagher said. "We will continue to work with the Statewide Prosecutors' Office to gather all of the information they need to prosecute all involved to the fullest possible extent under the law."

Arrested today were Luis F. Lorie, 36, his wife Lourdes R. Lorie, 42, and their daughter Lourdes Sanchez, 26, all of 10735 S.W. 58th Ave., Miami. Based on the department's investigation, Hines' office is prosecuting the three on charges of racketeering, criminal conspiracy to commit racketeering, organized fraud, and multiple counts of grand theft. All three have been booked into the Dade County Jail. Lorie's bond is set at $1 million, his wife's at $500,000 and their daughter's at $250,000.

According to both Gallagher and Hines, investigators are continuing to determine the full extent of the scheme. Department investigators said the scheme ultimately may have cost at least 20 lenders more than $15 million.

Investigators described the scheme this way:

The purported legitimate seller sells the property at or near fair market value. The "interim buyer" purchases the property from the legitimate seller with the intention of reselling immediately to a "straw buyer." The "straw buyer" purchases the property from the "interim buyer," who is not legitimately qualified for the mortgage loan obtained, and at this point both the "interim buyer" and the "straw buyer" are acting with the intent to defraud the mortgage lender.

As part of the transaction between the "interim buyer" and the "straw buyer," an appraisal is obtained inflating the value of the property by as much as 100 percent. To close the transaction, the title agent prepares a settlement statement that indicates, among other things, that the "straw buyer" brought funds necessary to complete the transaction when in fact all the funds involved have come from the mortgage lender who has been duped into funding a grossly inflated mortgage.

The department's investigators have determined that from January through August of 1998, the Lories and their daughter manipulated title commitment documents, closing documents and mortgage documents, and obtained false property appraisals for at least 12 real estate transactions in Southwest Miami and Miami Beach. The Lories and their daughter operated as Global Mortgage Investors, Inc., located at 814 Ponce De Leon Blvd., Suite 410, Coral Gables, but coordinated with various other Florida corporations including Southeast Land Title Corporation, Exclusive Real Estate Investments, Inc., and Rall Investments, Inc.

Florida's Department of Banking and Finance and the Florida Department of Business and Professional Regulation assisted the Department of Insurance, Division of Insurance Fraud, in the investigation. Deputy Chief Assistant Statewide Prosecutor James Cobb is serving as lead prosecutor.

The Department of Insurance, Division of Insurance Fraud, investigates various forms of fraud in insurance, including health, life, auto, property and workers' compensation insurance. Anyone with information about this case or another possible fraud scheme should call the department's Fraud Hotline at 1-800-378-0445. A reward of up to $25,000 is offered for information leading to a conviction.