Two Tucson men who were arrested this week as part of a nationwide mortgage-fraud crackdown have been in trouble with the law in the past, county court documents show.
The two, Chris Nero and Roy Fife, were among 36 Arizona defendants accused of inflating the value of at least 17 homes in the Tucson area, according to federal court records unsealed Thursday.
The federal case announced this week revolves around the government's claims that the defendants committed mortgage fraud by taking out overvalued loans with the help of fake buyers.
Court records show the two have been accused of felonies in previous, separate incidents.
Fife faced charges on forgery and fraudulent scheme and enterprise, and Nero on illegally conducting an enterprise, conspiracy to commit possession and/or transportation of marijuana, money laundering and identity theft.
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Nero's attorney declined to comment this week on the federal charges.
Attorney A. Bates Butler III, who appeared with Fife at his initial appearance this week, said there were "factual inaccuracies" in the government's case but he could not represent Fife because his assets were tied up in the court.
In January 2006, a Pima County Superior Court grand jury charged Nero with illegally conducted an enterprise by being associated with M.I.H. Real Estate Investors Inc.
The indictment also alleged that Nero — who according to court records changed his name in 2003 from Christopher Karl Sisneros — transported "large quantities" of marijuana and placed the drugs into stash houses controlled by co-conspirators.
An IRS spokesman could not say whether the alleged "cash back" scheme for which Nero is now indicted used the 17 or more Tucson home purchases for drug storage.
Fife's run-in with state authorities also has close real-estate connections, and Arizona Department of Real Estate records show Fife was a licensed real estate agent between March 1996 and January 2008. Last month, the state charged Fife with forgery, as well as fraudulent scheme and artifice.
At least one address listed in that indictment was involved in a civil suit, filed in December 2007, in which plaintiffs alleged Fife committed forgery and fraud, among a dozen total counts.
Although the alleged scams have perhaps raised eyebrows among ordinary consumers, so have they for some industry advocates, who say the dealings are not those of genuine real-estate agents.
"We're just as horrified by everything that's going on as everyone else," said Colin Zimmerman, the director of public affairs for the Tucson Association of Realtors.
"Part of being a Realtor is that you're held to a higher standard," he said, which includes a code of ethics that the group enforces. "We are very serious about how our ethics are upheld."
In April, Nero pleaded no contest to facilitation of a fraudulent scheme and artifice, but a plea agreement that may have detailed other outcomes was under seal. He is scheduled to be sentenced at the end of this month.
Fife's state case is still pending.
Earlier this week, Tucsonan Frank L. Padilla was sentenced to two years in prison and three years' probation, and must pay more than $1 million in fines after pleading guilty to mortgage fraud. In a phone call to the Arizona Daily Star on Friday, Padilla said the government ignored the practice for years.
"They just don't want people to make money," he said.
The more recent Arizona investigation into the alleged mortgage fraud, known as Operation Cash Back, was part of a nationwide effort that has resulted in indictments of more than 400 people.
The nationwide effort included the arrests of two former Bear Stearns employees.