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Crime & Safety

Naperville Woman Charged in Mortgage Fraud Scheme

Catherine Denwood, 42, faces one count of each theft by deception, conspiracy to commit a financial crime and financial institutional fraud.

A Naperville woman is among seven charged defendants who were arraigned Monday in what the Cook County State's Attorney's Office characterized as "an elaborate mortgage fraud scheme."

Officials say Catherine Denwood, 42, of Naperville, faces one count of each theft by deception, conspiracy to commit a financial crime and financial institutional fraud.

Denwood, along with Frances McCormick of Country Club Hills, posed as straw buyers to fraudulently purchase three homes in the Englewood and Back of the Yards neighborhoods of Chicago, according to a Cook County State's Attorney's Office press release. Authorities said Brent Bickhaus of Niles and Gayle Tracy of Batavia set up a trust used to purchase these properties. A fifth individual, Lorenzo Crooks of Chicago, then prepared fake financial documents which were used to attain three loans from legitimate lenders, officials said. Prosecutors say Richard Simmons of Chicago acted as the real estate agent on all three transactions, though he has no real estate license, while Mark Schwarzbach of Wayne acted as the closer on the deals.

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The Cook County's State's Attorney's Office said about $750,000 was defrauded by the defendants in the three transactions in April, June and October of 2010.

All seven were arrested April 28, and Judge Domencia Stephenson set bonds at $75,000 for Denwood, Bickhaus and Schwarzbach; $100,000 for Crooks, Simmons and McCormick; and $200,000 for Tracy. Having all pleaded not guilty, Schwarzbach is scheduled for a June 30 court date, while the other defendants will return to court July 12.

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A straw buyer refers to a buyer used to make a purchase on behalf of someone else. In this case, no mortgage payments were ever made and all seven individuals split the proceeds from the sale, according to the Cook County State's Attorney's Office.

The Cook County State's Attorney's Office worked on this case in conjunction with investigators from the Department of Housing and Urban Development and the U.S. Marshall's Office.

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