A man in the US state of Kansas has been has been sentenced to six years in prison for his role in a mortgage fraud conspiracy.

Manjur Alum was described by prosecutors as the leader of the mortgage scam which sometimes employed fraudulent letters of credit (L/Cs).

False statements

Alam pleaded guilty to one count of conspiracy to commit wire fraud and bank fraud, admitting in his plea that he led co-conspirators in a scheme to submit mortgage loan applications containing false statements.

The scheme defrauded two government-sponsored enterprises - the Federal National Mortgage Association (better known as Fannie Mae) and the Federal Home Loan Mortgage Corporation (better known as Freddie Mac) - as well as the US Department of Housing and Urban Development.

L/C forgeries

In some cases, Alam submitted a false L/C for nominal buyers. In other cases he submitted false verification of rent for nominal buyers.

In either case, Alam and his co-conspirators falsely represented that the homes would be a primary residence for them, even though they did not intend to live in the properties.

Alam, who had already pleaded guilty to conspiracy to commit wire fraud and bank fraud, must pay more than US$250,000 in restitution as well as serving his six-year jail term.

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