MIAMI At first glance, the 43-story building in Miami's international banking district seems little different from other high-rise condominiums overlooking the turquoise waters of Biscayne Bay.
But the 643-unit condo known as the Club at Brickell is a leader in mortgage foreclosures and it appears also to stand at ground zero in a blizzard of fraud that may lie behind many of the failed loans threatening to bury the U.S. property market.
America's subprime mortgage crisis is partly due to predatory, or aggressive, lenders, hard-sell tactics by mortgage brokers and an easing of underwriting standards in the $10 trillion home-loan industry.
But fraud accounts for a sizable share of the bad bets on mortgages, according to many industry experts, and lenders may have been victimized as much as anyone else.
"The lenders are holding the bag now, that's what we're finding out," said Glenn Theobald, head of a mortgage fraud task force formed in south Florida's Miami-Dade County in September.
Mortgage scams involve a cartel of inside players -- colluding property appraisers, real-estate brokers and accountants willing to draw up fake income statements and tax returns -- who recruit people with good credit histories to serve as a decoy or "straw buyer" in a real-estate deal.
The conspirators inflate the price of the property, to get the biggest loan possible, pay the sellers the original price and then pocket the excess loan money as "cash back" at the closing of the deal.
The decoy buyer is paid off -- often with just $5,000 -- and the property is quickly abandoned to foreclosure, said Theobald, a senior official with the Miami-Dade Police Department.
"It's an epidemic," said Nancy Hogan, a veteran realtor and former head of the Florida Real Estate Commission.
"The cash back, the fraud for profit, is what has been so rampant," she said.
The Club at Brickell has the highest current number of foreclosure proceedings involving any single south Florida property.
There may be other properties in the United States that hold the distinction of being riddled with more cases of apparent mortgage fraud than the Club.
But Doug Dewitt, a real estate broker contracted to work with several lenders on the valuation and disposal of foreclosed properties, said nearly 70 percent of the sales or closings at the Club over the last 18 months were questionable.
That works out to more than 200 possibly shady deals in a single building, he said.
The dubious transactions all fit a pattern that Theobald said should trigger "bells and whistles" for law enforcement anywhere -- time and time again properties that failed to sell for months when listed at around $450,000 were pulled from the market and then suddenly sold for more than $800,000.
Florida leads the nation when it comes to mortgage fraud, according to the Virginia-based Mortgage Asset Research Institute, a group that works closely with the U.S. Mortgage Bankers Association.
Many apartments could wind up being sold at auctions like one held last month for bank-owned properties in Fort Lauderdale, further depressing prices in a market suffering its biggest condo glut in decades.
"You've seen some of it already. They are actually having auctions to try and sell units," said Theobald, when asked about discount sales involving recently foreclosed properties.
"I don't know where it's going to end up," Theobald said. "I don't know when the bottom is going to be."
Ken Thomas, a Miami-based banking expert and lecturer at the Wharton School at the University of Pennsylvania in Philadelphia, said there was little surprise Florida led the country in mortgage fraud.
It stems, at least in part, in the way lenders plowed "easy money" into the local condo market before Florida's recent housing boom turned to bust, Thomas told Reuters.
"We're going to see a lot more of this fraud being exposed, especially as these units go into foreclosure," Thomas said.
"We were the poster child of the housing bubble ... maybe we should have expected more of this."