Mortgage fraud: Bronzeville building scrutinized

Posted March 8, 2010 at 2:42 p.m.

By Mary Ellen Podmolik | A title company, seven mortgage companies, six loan originators and two appraisers were cited by the state Monday for allegedly defrauding lenders of $7.7 million on a 27-unit condo building, all the units of which are in foreclosure.

The Illinois Department of Financial and Professional Regulation’s mortgage fraud task force said the alleged fraud occurred when all units in a building at 4725 S. Michigan were sold to straw buyers between late 2006 and October 2007 at artificially inflated prices and based on fraudulent appraisals. The buyers would state that the units would be their primary residence when in, fact, they were not, and buyers would receive cash kickbacks. All 27 units are now in foreclosure and the state said it has referred the case to the Federal Bureau of Investigations.

The state has revoked the license of Schaumburg-based Traditional Title Co. LLC, naming  Ira Kaufman and Elbert Reniva, both of Chicago, as two of its principals. Traditional Title is contesting the revocation.

The department’s division of banking also has revoked, fined and/or disciplined the mortgage company licenses of AM Mortgage Corp., Lincolnwood; Atlas Preferred LLC, Chicago; Exclusive Bancorp, Inc., Lincolnwood; KRK Financial Services, Inc., doing business as KRK Mortgage Bancorp, Inc. in Chicago; and Elite Financial Investments, Inc., Oak Brook.

Two other mortgage firms, C.D.K. USA Mortgage in Chicago and Country Mortgage Services, Inc., in Arlington Heights, each were cited for operating on a previously revoked license.

Loan originators involved included Theodore Cardenas of Schaumburg; John Karapournos of Skokie; Razzak Khader of Morton Grove; Zarak Khan of Chicago; Sara Mian of Niles; Jeff Townsend of Glendale Heights and Arfeen Ahmed.

The state’s department of professional regulation also filed formal complaints against real estate appraisers Choudhry Muzaffar and Jason Powell, both of Chicago, alleging that they inflated the value of the properties by $50,000 to $75,000.

Also, ENH Services LLC, Zeal Management LLC and Eliot Higueros all were charged with operating as real estate brokers without a license.

The state said it was tipped off the alleged scheme by a confidential informant.



  1. anon March 8, 2010 at 3:46 pm

    The south side is strewn with fraud like this. Look around and it’s on every block.

  2. Rufus MacDonald March 8, 2010 at 3:55 pm


  3. Community TV Network March 8, 2010 at 4:41 pm
  4. ChiCityMatt March 8, 2010 at 4:55 pm

    @anon – Did you notice that almost all of the companies involved in this fraud were located outside of the city (not on the southside). It is sad this fraud occured in a neighborhood that had been making so much progress!

  5. Horney Mann March 8, 2010 at 5:29 pm

    Right on Rufus! Tell it like it is.

  6. Reality Check March 8, 2010 at 5:55 pm

    Did you guys fire the editors, or what? The words in question woould be primary RESIDENCE, not resident, and those two principals would be “two OF”, not two OFF.
    Please try to spell correctly. You ARE a news outlet, after all.

  7. Chicagoboy March 8, 2010 at 7:39 pm

    Have you tried to get a loan recently? These criminals are some of the people who have contributed to making all our lives more difficult. Even the straw buyers should be prosecuted.

  8. concerned citizen March 8, 2010 at 9:09 pm

    And Zarek Khan involved in this is a police officer and Sara Mian is a wife of a police officer. Hoe can we ever be protected??

  9. krkinsurance March 20, 2010 at 4:14 pm

    oh wow… these people should be inside the bars.. i heard they are free now on a 1 lakh bond?

  10. concerned community member March 21, 2010 at 9:22 pm

    They belongs to police department so nothing is new for them

  11. Joe Dirk March 22, 2010 at 4:53 a.m.

    Hey how about the guy who actually owned the entire condo project???

  12. getitright April 30, 2010 at 2:34 a.m.

    Get it right that girl sara KHAN is not married to the police officer anymore.. They got a divorce 4 years ago! I wonder why lol she was on the rock of love season 1 haha