Mark Steven Diamond Sentenced to 17 Years for Reverse Mortgage and Home Repair Scheme Targeting Elderly Chicago Homeowners

Case from 2016–2025 (U.S. Attorney's Office latest release: Jan. 16, 2025). Published on Scammers.com Oct. 16, 2026; case status is current as of that date.

Mark Steven Diamond, 68, of Chicago, was sentenced Jan. 16, 2025, to 205 months, a little over 17 years, in federal prison for a scheme in which elderly homeowners unknowingly took out reverse mortgages to pay for home repairs he offered and often never did, according to the U.S. Attorney's Office for the Northern District of Illinois [1]. U.S. District Judge Franklin U. Valderrama also ordered him to pay $2.7 million in restitution.

All four people later charged as his co-schemers pleaded guilty. News reports say three of them were sentenced in October 2025 [5] [6] [7].

How the scheme worked

The U.S. Attorney's Office describes the scheme this way [1] [2] [3]:

1. Choosing targets. Diamond and his co-schemers picked elderly Chicago-area homeowners based on how much equity they had in their homes and how little they knew about finance. According to the 2017 indictment, the victims were 62 to 97 years old.
2. Offering repairs. Diamond offered to do home repairs. In some cases he told homeowners they had to sign documents to start the work. In fact, the papers were applications for reverse mortgage loans.
3. Taking the loan money. Co-schemers approved and originated the loans. Diamond kept the proceeds and often did no repairs. The indictment said title company representatives gave the loan checks to Diamond instead of to the homeowners.
4. Getting around relatives. According to the indictment, if a relative questioned whether a reverse mortgage was needed, Diamond would schedule a visit for a time he knew the relative would be away.

In his May 7, 2024, plea agreement, Diamond admitted victimizing at least 18 homeowners and obtaining about $929,000 in reverse mortgage proceeds. The government said it would argue at sentencing that there were at least 80 victims and about $6 million in losses [2]. At sentencing, HUD's Inspector General said the scheme defrauded "more than 100 elderly and vulnerable homeowners" [1]. CBS Chicago reported the total as 122 victims and about $10 million in home equity [6].

The fake HUD official

Cynthia Wallace was first charged in 2016 with posing as a federal housing official to get cash from homeowners [4]. According to the indictment, she found homeowners to have repairs done by Diamond while knowing he would not do the work. She also used the aliases "Shree Box," "Regina Johnson" and "Sherry Rice" [3]. CBS Chicago reported that at her sentencing, prosecutors played a recording of her posing as a HUD employee. In it, she warned a homeowner she would face foreclosure unless she paid an extra $500. CBS said Wallace made $62,000 from that part of the scheme [6].

The defendants

Mark Steven Diamond, 68, Chicago. He was indicted on seven counts of wire fraud and pleaded not guilty in June 2017 [3]. He later pleaded guilty, on May 7, 2024, to wire fraud affecting a financial institution [2]. He was sentenced Jan. 16, 2025, to 205 months and $2.7 million in restitution [1].

Co-schemers. The U.S. Attorney's Office named four: loan originators Gary Bohn of Hoffman Estates, Ill., and Matthew Fefferman of Munster, Ind.; Diamond's employee Cynthia Wallace of Sauk Village, Ill.; and title agency owner Forrest C. Fawcett of Fort Lauderdale, Fla. All four pleaded guilty before Diamond was sentenced [1].

• Gary Bohn: sentenced in October 2025 to 18 months in prison, according to National Mortgage News (citing Law360) and Block Club Chicago [5] [7]. National Mortgage News reported that prosecutors had asked for 28 months and credited his cooperation, which included wearing a recording device.
• Matthew Fefferman: sentenced in October 2025 to 30 months, according to Block Club Chicago [7].
• Cynthia Wallace: sentenced Oct. 23, 2025, to 42 months in prison and two years of supervised release, and ordered to pay more than $300,000 in restitution, according to CBS Chicago [6].
• Forrest C. Fawcett: Block Club Chicago reported in February 2026 that he was expected to be sentenced in 2026 [7]. Status pending; no later outcome found in public sources as of Oct. 16, 2026.

The investigation was conducted by HUD's Office of Inspector General and the FBI, with the Illinois Attorney General's Office [1].

Red flags

• A contractor who brings up a reverse mortgage, or brings a loan officer along, to pay for repairs.
• Being told to sign papers "to start the work" without time to read them or have a relative review them.
• A visitor who asks to come when family members aren't home.
• Someone claiming to be from HUD who demands cash to stop a foreclosure. HUD does not collect payments this way.

What to do if you're targeted

1. Talk to a HUD-approved housing counselor before signing any reverse mortgage (HECM) paperwork. Counseling is required for HECM loans. Find a counselor at hud.gov or call 800-569-4287.
2. Get repair contracts in writing and never let a contractor control loan proceeds.
3. Report suspected fraud to the HUD Office of Inspector General hotline at hudoig.gov, to the FBI at ic3.gov, and to the Illinois Attorney General.

Case status (as of Oct. 16, 2026)

Defendant	Court	Status as of Oct. 16, 2026	Source
Mark Steven Diamond, 68, Chicago	N.D. Ill.	Pleaded guilty May 7, 2024; sentenced Jan. 16, 2025, to 205 months and $2.7M restitution	[1], [2]
Gary Bohn, Hoffman Estates, Ill.	N.D. Ill.	Pleaded guilty; sentenced Oct. 2025 to 18 months (news reports)	[5], [7]
Matthew Fefferman, Munster, Ind.	N.D. Ill.	Pleaded guilty; sentenced Oct. 2025 to 30 months (news report)	[7]
Cynthia Wallace, Sauk Village, Ill.	N.D. Ill.	Pleaded guilty; sentenced Oct. 23, 2025, to 42 months, 2 years of supervised release, $300K+ restitution (news report)	[6]
Forrest C. Fawcett, Fort Lauderdale, Fla.	N.D. Ill.	Pleaded guilty; sentence not found in public sources as of Oct. 16, 2026	[1], [7]

Sources

1. U.S. Attorney's Office, Northern District of Illinois, "Chicago Businessman Sentenced to More Than 17 Years in Prison for Bilking Elderly Homeowners in Reverse Mortgage Scheme," Jan. 16, 2025. https://www.justice.gov/usao-ndil/pr/chicago-businessman-sentenced-more-17-years-prison-bilking-elderly-homeowners-reverse
2. U.S. Attorney's Office, Northern District of Illinois, "Chicago Businessman Pleads Guilty to Federal Fraud Charge in Connection With Reverse Mortgage Scheme Targeting Elderly Homeowners," May 7, 2024. https://www.justice.gov/usao-ndil/pr/chicago-businessman-pleads-guilty-federal-fraud-charge-connection-reverse-mortgage
3. U.S. Attorney's Office, Northern District of Illinois, "Chicago Businessman Arraigned on Fraud Charges in Connection with $7 Million Reverse Mortgage Scheme That Targeted Elderly Homeowners," June 22, 2017. https://www.justice.gov/usao-ndil/pr/chicago-businessman-arraigned-fraud-charges-connection-7-million-reverse-mortgage
4. U.S. Attorney's Office, Northern District of Illinois, "Chicago Woman Charged with Posing as Federal Housing Official to Scam Homeowners out of Cash," Feb. 3, 2016. https://www.justice.gov/usao-ndil/pr/chicago-woman-charged-posing-federal-housing-official-scam-homeowners-out-cash
5. National Mortgage News, "Ex-LO sentenced in Chicago-area reverse mortgage scheme," Oct. 17, 2025. https://www.nationalmortgagenews.com/news/originator-in-chicago-area-reverse-mortgage-scheme-sentenced
6. CBS Chicago, "Cynthia Wallace, accomplice of Chicago reverse mortgage con man Mark Diamond, sentenced to prison time," Oct. 23, 2025. https://www.cbsnews.com/chicago/news/cynthia-wallace-sentenced-prison-mark-diamond-reverse-mortgage-scam/
7. Block Club Chicago, "Families Scammed By Convicted Mortgage Fraudsters Are Still Fighting For Their Homes," Feb. 3, 2026. https://blockclubchicago.org/2026/02/03/families-scammed-by-convicted-mortgage-fraudsters-are-still-fighting-for-their-homes/

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