Chicago Businessman Pleads Guilty to Federal Fraud Charge in Connection With Reverse Mortgage Scheme Targeting Elderly Homeowners

CHICAGO - A Chicago businessman pleaded guilty today to a federal fraud charge for bilking elderly homeowners in a home repair and reverse mortgage scheme.

MARK STEVEN DIAMOND schemed with others to induce homeowners to unwittingly obtain reverse mortgage loans to pay for purported home repairs that Diamond offered to perform. Diamond and the co-schemers targeted elderly victims based on the amount of equity in their homes and their relative lack of financial sophistication. In some instances, Diamond concealed from the homeowners that they were applying for reverse mortgage loans by falsely representing that they needed to sign certain documents to start the repair work, when, in fact, the documents that Diamond caused them to sign were related to applying for the loan. After the loans were approved and originated by co-schemers, Diamond fraudulently pocketed the loan proceeds and often failed to perform any repairs.

Diamond, 67, of Chicago, pleaded guilty to a federal charge of wire fraud affecting a financial institution, which is punishable by up to 30 years in federal prison. Diamond acknowledged in a plea agreement that he victimized at least 18 Chicago-area homeowners by fraudulently obtaining approximately $929,000 from financial institutions in the form of reverse mortgage loan proceeds. It will be the government's position at sentencing that there were at least 80 victims and that Diamond's actions caused at least approximately $6 million in losses. U.S. District Judge Franklin U. Valderrama set Diamond's sentencing for Sept. 4, 2024.

The guilty plea was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, Machelle L. Jindra, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development's Office of Inspector General in Chicago, and Robert W. "Wes" Wheeler, Jr., Special Agent-in-Charge of the Chicago Field Office of the FBI. Substantial Assistance was provided by the Illinois Attorney General's Office. The government is represented by Special Assistant U.S. Attorney Brian P. Netols and Assistant U.S. Attorney Erin Kelly.

All four co-schemers charged in the investigation - loan originators GARY BOHN, of Hoffman Estates, Ill., and MATTHEW FEFFERMAN, of Munster, Ind., Diamond's employee CYNTHIA WALLACE, of Sauk Village, Ill., and title agency owner FORREST C. FAWCETT, of Fort Lauderdale, Fla. - previously pleaded guilty and admitted their roles in the fraud. They are awaiting sentencing.