Mortgage Fraud

Loan Broker Sentenced to 108 Months in Multi-Million-Dollar Mortgage Fraud Scheme


March 12, 2010 - ALEXANDRIA, VA—Michael Milan, 49, of Bethesda, Md., was sentenced to 108 months in prison, followed by three years of supervised release, for his role in carrying out a multi-million-dollar mortgage fraud scheme. Milan was also ordered to pay restitution of $3,141,409 and to forfeit $1,061,890 in proceeds he obtained.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Shawn Henry, Assistant Director in Charge of the FBI Washington Field Office, made the announcement after sentencing by United States District Judge T.S. Ellis, III.

“Michael Milan manipulated banks to get illegal loans for his clients and large fees for himself,” said U.S. Attorney MacBride. “That greed and deception has caused much of the pain we’re feeling right now in the mortgage market, and we are aggressively pursuing mortgage fraud cases to hold those who engaged in this fraud accountable.”

“Homeowners and homebuyers must be able to rely on the ethics and integrity of their brokers,” said Assistant Director in Charge Henry. “Mr. Milan’s conduct unfairly taints the image of hard-working, honest people seeking to help families under stress because of the current real estate market.”

According to court records, Milan was a consultant to various mortgage brokerage companies and conspired with others to defraud mortgage lenders into lending funds for the purchase and refinance of residential properties. Milan caused his associates to prepare false mortgage applications which contained false information about the income and assets of the borrowers. Some of the mortgage applications falsely claimed that the borrowers earned hundreds of thousands of dollars from a company, Collid LLC, which Milan controlled. Milan’s conspiracy submitted fraudulent loan applications for the purchase or refinance of 11 different properties and caused losses of more than $2.5 million but less than $7 million.

Court records indicate that Milan fled from the United States after the execution of a search warrant at his office in June 2008 and did not return until April 2009. During a detention hearing held after his return, Milan attempted to explain his extended flight from the U.S. by providing fraudulent Iranian court documents, which falsely claimed that he had been incarcerated in Iran during the summer of 2008. As part of his plea on Dec. 1, 2009, Milan acknowledged that he attempted to obstruct justice with these false documents.

Milan is the sixth defendant convicted by the investigation, which remains ongoing. Others convicted include a settlement agent, a loan officer who worked with Milan, and Milan’s son, Dustin Milan.

This case was investigated by the FBI’s Washington Field Office. Assistant United States Attorneys Edmund P. Power and Stephen P. Learned prosecuted the case on behalf of the United States.