Loan Originator Kevin Smith Sentenced to 118 Months for $2.6 Million Mortgage Fraud Run Through Church Investment Seminars

Case from 2024–2025 (U.S. Attorney's Office release: Sept. 20, 2024; later developments are from court records and other sources cited below). Published on Scammers.com Oct. 16, 2026; case status is current as of that date.

Kevin Smith, 52, of Melrose Park, Illinois, a loan originator, was convicted by a federal jury on Sept. 6, 2024, on all five counts of bank fraud. Prosecutors said he ran a scheme that fraudulently obtained about $2.6 million in government-guaranteed mortgage loans on 14 Chicago properties [1]. He was later sentenced to 118 months in prison. On Nov. 13, 2025, the U.S. Court of Appeals for the Seventh Circuit affirmed his conviction and sentence [2].

How the scheme worked

According to the U.S. Attorney's Office for the Northern District of Illinois and the Seventh Circuit [1] [2]:

1. Lining up sellers. The Seventh Circuit said Smith offered to find buyers for property owners' Chicago-area properties in exchange for part of the sale proceeds.
2. Recruiting buyers at seminars. Smith recruited buyers at real estate investment seminars held in Chicago-area churches and hotels, prosecutors said. According to the appeals court, many of them did not qualify for government-insured mortgages.
3. Lying on loan applications. He had buyers falsely tell lenders that the homes would be their primary residences and that the down payments were their own money. He supplied the down payment money himself or through others.
4. Hidden kickbacks. After closing, Smith paid buyers money he called "grants" and kept payments from the sellers, without telling the lenders.

The appeals court said all 14 properties were foreclosed on or sold at a loss. Because the Federal Housing Administration and the Department of Veterans Affairs backed the loans, much of the roughly $2.3 million loss fell on the government [2].

The person sentenced

Kevin Smith, 52, Melrose Park, Ill. (N.D. Ill. No. 1:21-cr-00128)

• Charges: indicted in 2021 on five counts of bank fraud [2].
• Trial: he represented himself, according to the Seventh Circuit. A jury convicted him on all five counts on Sept. 6, 2024, after a two-week trial [1] [2].
• Sentence: 118 months in prison, according to the Seventh Circuit [2]. The district court docket shows a sentencing hearing held Feb. 7, 2025, before U.S. District Judge John F. Kness and judgment entered Feb. 18, 2025 [3].
• Appeal: the Seventh Circuit affirmed on Nov. 13, 2025 (No. 25-1261). The court upheld sentencing enhancements for his role as a manager or supervisor, finding he recruited at least 12 knowing accomplices, and for obstruction of justice. The judge had found that Smith made up vision problems to delay his trial [2].
• Investigation: HUD Office of Inspector General and the VA Office of Inspector General [1].

Red flags

• "Investment seminars" that promise easy homeownership or rental income and steer you to one loan officer.
• Someone else offering to pay your down payment while you tell the lender it's your own money.
• Being told to say you'll live in a property you plan to rent out.
• A "grant" or cash payment to you after closing.

What to do if you're targeted

1. Never sign a loan application with false information. You are liable for the loan, and lying on it is a federal crime.
2. Get advice from a HUD-approved housing counselor at hud.gov.
3. Report mortgage fraud to the HUD OIG hotline at hudoig.gov or the VA OIG at vaoig.gov.

Case status (as of Oct. 16, 2026)

Defendant	Court	Status as of Oct. 16, 2026	Source
Kevin Smith, 52, Melrose Park, Ill.	N.D. Ill. (1:21-cr-00128); 7th Cir. No. 25-1261	Convicted at trial Sept. 6, 2024, on 5 bank fraud counts; sentenced to 118 months (hearing Feb. 7, 2025); affirmed Nov. 13, 2025	[1], [2], [3]

Sources

1. U.S. Attorney's Office, Northern District of Illinois, "Loan Originator Convicted in $2.6 Million Mortgage Fraud Scheme," Sept. 20, 2024. https://www.justice.gov/usao-ndil/pr/loan-originator-convicted-26-million-mortgage-fraud-scheme
2. U.S. Court of Appeals for the Seventh Circuit, United States v. Kevin Smith, No. 25-1261 (order, Nov. 13, 2025), via Justia. https://law.justia.com/cases/federal/appellate-courts/ca7/25-1261/25-1261-2025-11-13.html
3. CourtListener, United States v. Smith, No. 1:21-cr-00128 (N.D. Ill.), docket. https://www.courtlistener.com/docket/59928917/united-states-v-smith/

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