Oregon Public Broadcasting

As the real estate market cools, sub-prime loans and other murky deals are surfacing. As Kristian Foden-Vencil reports, a Portland businessman has been found guilty of 20 counts of fraud and money laundering concerning his real estate dealings.

C.J.Brigham faces up to 25 years behind bars for a scheme in which he obtained 30 loans on 15 properties in the Portland Vancouver area.

U.S. Attorney, Dwight Holton, says Brigham got about $5 million from banks with the help of 11 front men.

Dwight Holton: “What he did was pay people to purchase houses and he promised them they’d never have to make a mortgage payment and once he got the loans, using the people he paid, he diverted hundreds of thousands of dollars to himself from the loan proceeds. It’s what they call in the mortgage industry, straw purchases.”

Such schemes, while illegal, can work in a booming real estate market -- where homes are held for a short while and then sold for big profits. But they don’t work in a cooling market.