Alleged mortgage fraud ringleader remains under house arrest

A Country Club Hills man accused of heading one of the biggest federal mortgage fraud schemes ever prosecuted in Chicago will remain under house arrest, under conditions set Thursday during a hearing at the Dirksen Federal Building.

Bobbie Brown Jr.--who appeared in federal district court wearing the same blue shirt and jeans he wore to an arraignment on Tuesday--has been threatening individuals involved in the case, according to Assistant U.S. Attorney Daniel May. May had sought Brown's detainment on Tuesday, but U.S. Magistrate Judge Jeffrey Cole placed Brown under house arrest at his mother's home pending Thursday's hearing.

May and Brown's lawyer, Michael Falconer (who was appointed by the judge when Brown's own lawyer failed to appear on Tuesday), decided that Brown could remain under house arrest if he refrained from contacting a number of the defendants involved in either of the mortgage fraud cases in which he has been indicted.

During a July 8 arraignment for another group of defendants allegedly involved in the scheme, May is expected to provide a list of 30 people with whom Brown cannot have contact. According to May, Brown has issued threats to both the defendants who were arraigned on Tuesday and those who will appear in court next week.

When asked about these accusations, Falconer replied: "Those allegations are probably a year old. We don't think anyone's in danger." He said the alleged threats were to the effect of, "If you talk to the government, you'd better watch your back." But that did not imply bodily harm, he emphasized.

May also asked that Brown not contact the Black Gangster Disciples, the Gangster Disciples, or the New Breed gang, of which he said Brown was a "self-admitted general." Falconer answered that Brown's ties to the gang were "ancient history," and that his client would have no trouble with that court order.

Brown must also explain the whereabouts of a number of cars previously in his possession. Many were repossessed in 2007 and 2008, but some are still missing. May added that Brown enlisted "straw purchasers" to buy cars for him between 2005 and 2007, and asked that Brown explain their whereabouts as well.

Falconer accepted these conditions. "In an effort to show he's not the Al Capone he's made out to be, we're going to help out the government," he said.

Both sides said they were satisfied with today's hearing. May said: "This is not the most restrictive, but there are certainly less restrictive [options]. This is the one that will guarantee the safety of individuals short of him being detained."

According to the U.S. Department of Justice, Brown was allegedly the ringleader of a mortgage scheme involving more than 30 defendants covered under two indictments. Brown and his co-defendants allegedly fraudulently obtained $111 million in loans on some 183 homes in locations ranging from the Chicago suburbs to Nevada and California.

The federal indictment charges that the defendants included "straw purchasers" recruited to purchase homes, loan originators who prepared false loan applications, a lawyer who oversaw home closings and builders. The indictment was the result of a national investigation into mortgage fraud, code-named "Operation Malicious Mortgage," which lead to charges against more than 400 people, 67 from the Chicago area.