Would this be mortgage fraud?

[williamlpr]

What is the name of your state (only U.S. law)? MI (Edit: Michigan)

To avoid needing to show 2 years of solid self employment and business records, and instead show 6 months of W2 non self employment income:

Person A forms corporation X. Person B, a non-relative friend of Person A, has pre-existing corporation Z. Corporation Z issues Person A a paycheck for 6 months, providing standard W2 income. Corporation X (Person A's corporation) reimburses Corporation Z for the paycheck including payroll tax.

I'm not interested in doing something illegal, even if chances being caught are slim. I don't want to be worrying or looking over my shoulder.

But, would this somehow be legal to do? Taxwise I don't think there's a problem because a corporation can pay money to someone even if they don't get a good benefit from it. I don't think it's quite money laundering because all the income would be from legitimate sources, no illegal sources. Seems fishy to me, but I wanted to ask everyone to see if it would somehow turn out to be legal.

[Antigone*of*Greece]

Originally Posted by williamlpr

What is the name of your state (only U.S. law)? MI

To avoid needing to show 2 years of solid self employment and business records, and instead show 6 months of W2 non self employment income:

Person A forms corporation X. Person B, a non-relative friend of Person A, has pre-existing corporation Z. Corporation Z issues Person A a paycheck for 6 months, providing standard W2 income. Corporation X (Person A's corporation) reimburses Corporation Z for the paycheck including payroll tax.

I'm not interested in doing something illegal, even if chances being caught are slim. I don't want to be worrying or looking over my shoulder.

But, would this somehow be legal to do? Taxwise I don't think there's a problem because a corporation can pay money to someone even if they don't get a good benefit from it. I don't think it's quite money laundering because all the income would be from legitimate sources, no illegal sources. Seems fishy to me, but I wanted to ask everyone to see if it would somehow turn out to be legal.

You are in Minnesota and I am in California and I can smell the rotten fish all the way from there.

[williamlpr]

Michigan actually, but I'm sure that won't change your answer.

[swrdmbo]

The real issue here is that you are misrepresenting (lying) your income AND employment.

You are NOT an employee of Corp. Z, and you would be telling the bank that you are, That is fraud.

You are asking the bank to give you a mortgage based on FRAUDULENT information. That is fraud.

In applying for the mortgage you have to sign papers stating that all the information you submit to them is accurate and true . You would be lying.



So what part of this do you actually think would be remotely legal, and OK?
It is FRAUD, plain and simple.

[HomeGuru]

Originally Posted by williamlpr

What is the name of your state (only U.S. law)? MI (Edit: Michigan)

To avoid needing to show 2 years of solid self employment and business records, and instead show 6 months of W2 non self employment income:

Person A forms corporation X. Person B, a non-relative friend of Person A, has pre-existing corporation Z. Corporation Z issues Person A a paycheck for 6 months, providing standard W2 income. Corporation X (Person A's corporation) reimburses Corporation Z for the paycheck including payroll tax.

I'm not interested in doing something illegal, even if chances being caught are slim. I don't want to be worrying or looking over my shoulder.

But, would this somehow be legal to do? Taxwise I don't think there's a problem because a corporation can pay money to someone even if they don't get a good benefit from it. I don't think it's quite money laundering because all the income would be from legitimate sources, no illegal sources. Seems fishy to me, but I wanted to ask everyone to see if it would somehow turn out to be legal.

**A: what a joke. Of course it is illegal. If you need another opinion contact the IRS.