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TUCSON - A former Tucson loan officer has been indicted in a $6 million mortgage fraud conspiracy.

A federal grand jury in Tucson returned a four count indictment on February 16 against Rex Adams, 52, of Tucson, for Conspiracy to Commit Wire Fraud, Wire Fraud, and False Statement to Influence a Financial Institution.

At the time of the allegations, Adams worked as a manager and loan officer for a mortgage broker in Tucson. The indictment charges Adams for his involvement in a "cash back" mortgage fraud conspiracy that occurred between February and June 2006. The indictment alleges that the co-conspirators used straw buyers to purchase nine properties in Tucson, Nogales, and Vail. These properties were purchased between February and June 2006, for prices ranging from $530,000 to $1,300,000. The co-conspirators obtained approximately $6,000,000 in fraudulent loans to purchase these properties. Adams was the seller of four of the properties.

According to the indictment, the mortgage loan applications used to obtain these loans contained at least one or more of the following material misrepresentations: (1) false statement concerning the applicant's intent to reside at the property as a primary residence; (2) false statement concerning monthly income; (3) false representation concerning employment, or (4) failed to disclose that the buyer had recently purchased another property.

In some of the transactions, the co-conspirators concealed from the lenders that large payments were made to an unrelated third party using a portion of the fraudulently obtained proceeds. Each of the loans or properties in the indictment went into default, "short sale," or foreclosure after the loan applicants failed to make payments on the mortgages.

If convicted, Adams could face up to 30 years in prison, a fine of $1 million or both for each count.