1 stolen wallet, $412,000 in hole
Identity thieves cash in on 3 phony mortgages
By David Jackson
Tribune staff reporter
Published January 8, 2006
Second City student improv performer Meghan Ross took all the obvious steps when her wallet was snatched in a crowded bar three years ago.
Grabbing a cell phone, the 22-year-old canceled her credit cards and filed a police report. She woke her mother for advice.
She made follow-up inquiries over the next few days, then figured the ordeal was over, costing her the $40 in cash she lost.
Sixteen months later, in April 2004, a private detective tracked down Ross' parents and handed them a sheaf of court papers. Ross was being sued by giant lending companies based in New Jersey, California and Pennsylvania.
It turns out that her wallet had been filched by a sophisticated mortgage fraud crew.
Ross' story shows how something as simple as a stolen wallet--which used to mean somebody might run up a tab of a few hundred dollars at a nearby store--can plunge a victim into a world of high-stakes fraud involving people and places never heard of and sums never imagined.
Told in land records, interviews and internal loan company files, her ordeal also shows how the booming crime of mortgage fraud can play out beyond the reach of law-enforcement and lenders' safeguards.
Using Ross' identity in an audacious series of face-to-face scams, con artists secured home loans worth $412,300 on three West Side buildings that they didn't own.
Ross now has been sued by three lending companies seeking full repayment. Her family has paid about $10,000 in legal bills fending off those claims. And her good credit has been shredded--she can't rent an apartment or lease a car without her parents co-signing.
Ross met with several law-enforcement agencies but got little help. At one meeting, she recalls a Chicago police detective advising her to dye her hair and move out of town: "He told me, `These people are dangerous.'"
Chicago police spokeswoman Monique Bond said Ross' case is closed, and it is not clear who the detectives were, but Bond said she could not imagine an officer saying that to a victim.
Following a trail from Ross' credit report through land records to title company documents to a title company, a Tribune reporter was able to trace Ross' stolen identity in less than two weeks.
Her identity was assumed by a 37-year-old check forger, Freddie "Knucklehead" Johnson, who was already on the lam when he began using her name in real estate transactions, the Tribune found.
On June 4, 2003, Johnson was scheduled to report to federal prison to begin a 15-month sentence for taking part in a conspiracy that used counterfeit checks to buy race car engines, jewelry and pit bull dogs. Johnson failed to show up at prison, federal court records show, and a judge immediately issued a warrant for his arrest.
But bank records indicate that he was still in Chicago.
A week after Johnson disappeared, on June 11, 2003, he endorsed and deposited one $75,818 mortgage check from the "Ross" closings in an account at a West Side bank, records examined by the Tribune show.
Two more deals followed within the next month. Johnson remains a fugitive, federal court records show.
Like Ross, the actual owners of the three West Side homes were plunged into legal and financial chaos.
The family of 75-year-old Ruth Williams spent personal funds--she declined to say how much--to clear the title to her brick two-story home at 4830 W. Arthington St.
"I got mine straightened out," Williams said. "I don't know about the others."
