Man sentenced 17 years for defrauding elderly West Side homeowners
A Chicago man was sentenced Thursday to 17 years in prison after pleading guilty to swindling more than 100 elderly homeowners out of $7 million through a mortgage and home repair scheme.
Mark Diamond, 68, and four co-defendants targeted low-income West Side homeowners who were at least 62 years old and qualified for a reverse mortgage loan, according to the U.S. Attorney’s Office for the Northern District of Illinois. The four other defendants have also pleaded guilty to their roles and are waiting to be sentenced.
Diamond led the scheme, lying and persuading his victims into signing up for reverse mortgage loans he would find ways to benefit from, such as by putting liens on their properties for fake repairs he claimed to have made. His oldest victim was 98.
The scheme started in 2008 and continued until 2015, according to Diamond’s plea agreement.
Diamond pleaded guilty last year to one count of wire fraud affecting a financial institution. On top of his 205-month sentence in federal prison, Diamond was ordered to pay $2.7 million in restitution.
In some cases, Diamond lied to the homeowners, telling them they had to sign paperwork for supposed repair work when actually the documents were signing the victims up for a reverse mortgage loan, prosecutors said.
In other instances, Diamond would tell the homeowners that he was sent by “the city” and that the home repairs wouldn’t cost the homeowner any money, insisting that it would be paid for through a government program, court documents said.
“On many occasions, the homeowners, due to age, disability, and/or lack of financial sophistication, did not know or understand how much work they had agreed to or how much equity they had in their respective properties,” according to court documents .
The case was investigated by the FBI and the U.S. Department of Housing and Urban Development’s Office of Inspector General, with help from the Illinois Attorney General’s Office.
“Many of these victims were older homeowners who worked and saved their entire lives, and their only mistake was trusting an individual who specifically targeted them to be victims of his scam,” Attorney General Kwame Raoul said in a statement.
Diamond was arrested in 2017. The feds said they interviewed Diamond’s victims and their family members, recorded Diamond’s conversations, attended meetings with his accomplices while undercover and searched Diamond’s office in the 2300 block of North Damen.
Diamond and his company, OSI Financial Services Inc., entered into a consent decree in 2003 that enjoined him and the company from closing any loans. The Illinois Department of Financial and Professional Regulation also suspended Diamond’s loan originator registration for four years starting April 27, 2010. Diamond’s scheme violated both orders.
“Diamond’s scheme defrauded more than 100 elderly and vulnerable homeowners, preying upon their trust and devastating them financially,” HUD Inspector General Rae Oliver Davis said in a statement.
“His sentencing today is a sobering reminder of the unique harm caused by predatory reverse mortgage schemes. These egregious criminal acts will not be tolerated, and my agency will continue to work with our law enforcement partners to hold other individuals like Diamond accountable for their actions.”