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Also charged was Margaret Keefe, a former Pewaukee closing agent.
The ease with which Cannon received a state loan originator - or mortgage broker - license despite having been convicted of dealing cocaine and burglary was highlighted in an investigative series by the Journal Sentinel. That series, "Easy Money," examined the havoc caused by a variety of real estate practices that contributed to the nation's mortgage meltdown, particularly in the subprime market.
The six-count federal indictment against Cannon, 46, charges that he paid people to serve as surrogate buyers to purchase Milwaukee properties at inflated prices. Cannon - whose rap sheet includes convictions for drug and white-collar crimes - is in federal custody in Chicago for violating probation on a tax conviction.
"Easy Money," examined the havoc caused by a variety of real estate practices that contributed to the nation's mortgage meltdown, particularly in the subprime market.
The series disclosed that more than 340 people with criminal records held mortgage broker licenses in 2008. Since then, Congress has ordered states to not provide broker licenses to people convicted of felonies during the prior seven years, as well as those convicted of flagrant crimes, such as embezzlement and armed robbery.
A state bill that would have added drug dealers to the list of those banned for life from ever being Wisconsin mortgage brokers died in a state legislative committee in 2009.
Buyers in the dark
(READ WHAT YOU SIGN!)
The indictment issued Tuesday alleges the straw buyers enlisted by Cannon were largely clueless about the properties they were purportedly buying.
"The straw buyers often purchased several properties at the same time," the indictment charges. "The straw buyers never saw the properties to be purchased, did not negotiate the purchase price, did not intend to occupy the properties, and did not intend to make any mortgage payments with respect to these properties."
Medellin, who was earning $9.25 an hour at the time, said he thought he was applying for a job as a property manager when he signed numerous forms that were later used to obtain a $103,500 high-interest loan. The mortgage was canceled last year, and the insurer for the now-defunct mortgage company paid Medellin $87,000.
Cannon has long been a well-known figure to local and federal law enforcement.
The paper reported in 2009 that the IRS was investigating a series of real estate deals involving Cannon, who worked for United Lending, a now-closed mortgage brokerage.
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