Man Whose Mortgage Fraud Victims Included Iraq War Refugees Sentenced in Federal Court

A 43-year-old Granger man was sentenced to 90 months in jail on wire fraud, bank fraud and conspiracy charges filed after the government said he and a business partner defrauded customers, including a West Des Moines couple who fled war-torn Baghdad, Iraq, in 2008, of more than $1 million.

Paul Kramer, 43, was sentenced Monday in U.S. District Court for the Southern District of Iowa in Davenport, according to a news release. The sentence handed down by U.S. District Judge James E. Gritzner also includes five years’ supervised probation after he is released from prison.

In the release, U.S. District Attorney Nicholas A. Klinefeldt said that from 2006 through 2009, Kramer knowingly used his mortgage company, Kramer Mortgage, and his real estate closing company, Iowa Closing and Escrow, to defraud multiple lenders out of over $1 million.

The victims included Mohamed Rheem and his family, who fled Baghdad in 2008 because of violence and threats from insurgents who were angry that Rheem had assisted the United States Army. Rheem quickly got a job after his family arrived in Iowa in 2008 and over the next 18 months saved enough for a down payment on the purchase of a home in West Des Moines – the first and only house he has ever purchased in the United States. And then he almost lost it because of the actions of the defendant.

Kramer executed the fraud against his victims, in part, in connection with a real estate development company, LDF.

Kramer and the members of LDF, including Lane Anderson, orchestrated straw sales of thirteen properties to another LDF member, Shannon Flickinger. LDF was the true buyer but LDF could not qualify for financing for the purchase of the properties because the company already had too much debt.

Flickinger was used as a straw buyer to obtain the financing to purchase the additional homes. At Kramer’s direction and with Kramer’s oversight Kramer Mortgage submitted loan applications in which Flickinger was named as the buyer despite the fact that Kramer knew that LDF was the true buyer.

With Kramer’s knowledge, Flickinger’s income was grossly inflated in the applications in order to qualify him for the loans. After Flickinger’s fraudulent loan applications were approved, the straw sales were closed at Kramer’s mortgage company with Kramer’s knowledge. Kramer closed the sales despite the fact that Flickinger paid no down payments for any of the properties, contrary to the documentation that was provided to the lenders.

Kramer defrauded one particular bank by intentionally concealing the sales of properties that had been pledged to the bank as collateral for a $4 million line of credit for Kramer. After the sales of multiple properties in which the proceeds were owed to the bank, Kramer kept the proceeds and used them to pay his own personal or business expenses. Kramer also pledged several properties to more than one bank, without the banks’ knowledge, to obtain additional loans. Kramer’s activities resulted in the primary bank suffering significant losses and also left many homeowners unable to sell or refinance their homes because they did not have clear title to their properties. Some homeowners were threatened with foreclosure due to Kramer’s activities.