U.S. Attorney Morris Pasqual | U.S. Department of Justice
A man from Schererville, Indiana, has been sentenced to over three years in federal prison for orchestrating a mortgage fraud scheme in Chicago. The fraudulent activities resulted in financial institutions losing more than $1.5 million.
Lee Holliday, 66, admitted guilt last year to a federal bank fraud charge. U.S. District Judge Sara L. Ellis sentenced him to three years and three months in federal prison.
Holliday's plea agreement revealed his involvement in mortgage fraud during 2011 and 2012, linked to purchasing properties on Chicago's West and South Sides. He recruited buyers, provided funds for down payments—only 3.5% of the purchase price due to Federal Housing Authority loan insurance—and worked with them to buy homes at inflated prices, splitting the proceeds with both buyers and sellers. Despite promising rental income from these properties, most buyers eventually fell behind on their mortgage payments, leading seven properties into foreclosure proceedings. The fraudulent activities led lenders to lose approximately $1.53 million through false loan applications.
In addition to the mortgage fraud scheme, Holliday also confessed to committing Covid-relief fraud in 2020 and 2021 by illegally obtaining $391,869 in Paycheck Protection Program funds.
The sentencing was announced by Morris Pasqual, Acting United States Attorney for the Northern District of Illinois, alongside Machelle L. Jindra from the U.S. Department of Housing and Urban Development’s Office of Inspector General in Chicago. Assistance was provided by the FBI Chicago Field Office, with representation from Assistant U.S. Attorney Stephanie C. Stern and former Assistant U.S. Attorney Charles W. Mulaney.
“FHA loans are intended to help people who could not otherwise afford a home,” said Acting U.S. Attorney Pasqual. “In this case, the money that was supposed to help those people and improve their neighborhoods instead went into the defendant’s pockets.”
“Lee Holliday repeatedly engaged in an egregious mortgage fraud scheme causing borrowers to falsely represent critical income and asset information,” stated HUD-OIG SAC Jindra. “When people take advantage of HUD-insured mortgage programs, it limits opportunities for hard-working individuals trying to achieve the American dream of homeownership."
