CHARLOTTE, N.C. - Federal prosecutors say Starr Ilzhoefer helped run a mortgage fraud scheme that allegedly stole $1 million.
She was a contestant on the hit TV show, Project Runway. She went on to practice law as a corporate lawyer for respected firms. Then, she went into real estate.
Now, she's back in the spotlight, charged with mortgage fraud. Federal prosecutors say she helped trick the Federal Housing Administration and private financial institutions out of $1 million.
They say the defendants targeted distressed homeowners, promised them foreclosure rescue and financial recovery, and convinced them to sell for less then they still owed lenders, a short sale.
Prosecutors say Ilzhoefer and the others lied on paperwork to lenders and already had other buyers waiting in the wings so they could flip the properties quickly, sometimes even on the same day.
Prosecutors say the defendants also created shell companies to pave the way.
But, Ilzhoefer's lawyer gave Action 9 a statement, saying, "The government claims that way back in the great recession this young woman somehow tricked banks into selling their distressed real estate for less than what the banks now believe it was worth. We look forward to refuting these claims in court."
Prosecutors also charged Aaron Guido in this case.
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