Media reports and court records reveal that on August 24, 2009 a complaint was filed in the US District Court in Orlando by the Secret Service which alleges that Victor Cedeno had stolen over $1.5 million dollars from the proceeds of short sales he managed on behalf of his former employer Taylor, Bean and Whitaker (TBW).

Picture from MSNBC

The complaint states that a series checks made payable to TBW were paid into an account opened by Cedeno with the Navy Federal Credit Union in the name of “Tailor Bean W.”.

The scheme was reported to the Secret Service on August 12, 2009 by James Dooley, a Senior Investigator, at the credit union after an employee in their Orlando branch became suspicious of the name differences between the checks and the account and that Cedeno was attempting to obtain a cashiers check for $800,000.

Cedeno was fired by TBW on August 13, 2009 and he is now wanted and believed to have fled to the Dominincan Republic.

In the following press release Jeffrey H. Sloman, Acting United States Attorney for the Southern District of Florida, Michael J. Folmar, Acting Special Agent in Charge, Federal Bureau of Investigation, Miami Field Office, and J. Thomas Cardwell, Commissioner, State of Florida, Office of Financial Regulation, announced the August 25, 2009 Indictment of defendants Daniel Stephen, 42, of Miami Shores, FL, Clotilde Jean, 43, of Miramar, FL, and Patricia DePons, 53, of Miami Shores, FL.
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Additional Materials

• Press Release
• Indictment

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The defendants were charged with conspiracy to commit mail fraud and mail fraud, in violation of 18 U.S.C. § 1343, for their participation in a scheme to sell vacant land.  Through this scheme, the defendants defrauded more than 1,000 victims of approximately $10.6 million.  If convicted, the defendants face a possible maximum statutory sentence of 20 years’ imprisonment on each count.

This case arose from the sale of property in North Florida and Georgia by First Loan Solution, a company owned and operated by defendant Daniel Stephen and his partner, co-defendant  Clotilde Jean.  According to the Indictment, Stephen, Jean, and other First Loan Solution employees sold land to members of the Haitian community in Miami Dade County using advertisements on Haitian radio, leaflets in the community, bus trips to North Florida and direct solicitations of the buyers. 

The Indictment alleges that Daniel Stephen, Clotilde Jean and other First Loan Solution employees made material misrepresentations to induce the buyers to purchase the vacant land.  For example, Stephen, Jean and their employees allegedly represented to potential buyers that First Loan Solution and Stephen actually owned the land that was being sold to them.  In fact, however, First Solution and Stephen did not own the land.  Stephen also represented that First Loan Solution would maintain the buyers’ deposit money in escrow prior to closing on the transactions.  In fact, however, Stephen used that money for business and personal expenses.  Stephen and Jean further represented that the buyers were purchasing individual parcels of land on which the buyers could build.  In fact, however, the buyers were purchasing land collectively with other buyers through a limited liability company, and could not build individually on the property.

According to the Indictment, Stephen hired a title company to serve as closing agent.  DePons was responsible for running the day-to-day affairs of the title company.  DePons conducted the closings on the sales, and collected from the buyers the balance due on the sale and the title company’s closing fees.  At the closings, DePons issued fraudulent warranty deeds and closing statements to the buyers in an effort to make the closings appear legitimate.  Ultimately, the buyers never received title to the land nor, in most cases, refunds of the monies paid to Stephen, Jean and DePons for the land. 

Mr. Sloman commended the investigative efforts of the Federal State Mortgage Fraud Strike Force with special commendation to the Federal Bureau of Investigation and the State of Florida Office of Financial Regulation.  The case is being prosecuted by Assistant U.S. Attorney Peter A. Forand.

The following was taken from the website of the Collin County (TX) District Attorney. [PDF] [Link]

Over the course of several years, John Barry orchestrated a mortgage fraud scheme involving eleven homes on Hills Creek Drive in McKinney, Texas, and numerous other properties in the Dallas-Fort Worth metroplex. Barry purchased homes at fair market value and sold them to straw buyers for inflated prices supported by fraudulent appraisals.

[Editor Note - Barry was subject of two indictments each with three counts. [Indictment 1] [Indictment 2]. The District Attorney’s office told us that Barry was found guilty on all six accounts after roughtly 1 hours deliberation.]

The straw buyer borrowers’ applications for mortgage loans contained numerous false statements, including representations that the borrowers worked for one of Barry’s companies and earned in excess of $20,000 per month. Barry also transferred money into the borrowers’ bank accounts to ensure that they qualified for their loans, and paid the borrowers bonuses of $20,000 or more for each of the multiple homes they purchased. From the fraudulently-obtained loan proceeds for each of the homes in question, Barry could pocket two hundred thousand dollars or more. Each of the properties involved in Barry’s scam subsequently went into foreclosure.

Barry was indicted for two counts each of Money Laundering, False Statement to Obtain Property or Credit, and Securing Execution of a Document by Deception, in connection with two of the properties he purchased on Hills Creek Drive. On July 14, 2009, a Collin County jury found Barry guilty of all six counts, and the court sentenced him to 25 years confinement plus a $10,000.00 fine on each count.

The cases were tried by Assistant District Attorneys Benjamin Smith and Christopher Milner.

On August 19, 2009 the Arizona Department of Financial Institutions published a Consent Order to revoke the mortgage broker license of Global Mortgage, LLC dba Like Financial and its owner Suzanne G. Kensington-Like [LinkedIn Profile].

The Findings of Fact for the matter show that, amongst other things, the company’s loan officer whose name is shown as “Ernie B” closed a number of loans which contained loan misrepresentations and concealment. Those misreps and concealments were the failure to disclose other properties and associated mortgages on loan applications.

The Findings of fact mention two borrowers, Clint and Angela Rogers who run the Clint Rogers Ministries. A spreadsheet of all of their property transactions as of June 2009 is attached below. It was compiled from public record by the Editor.
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Additional Materials

• Consent Order [1mb]
  
• Spreadsheet of property transactions
• Maricopa County Property Records
• Nevada Department of Business Records (#26 on Page 6)

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In particular Ernie B processed the following allegedly fraudulent transactions:

Borrower K.H.

1. The borrower KH bought 6747 E Camino De Los Ranchos, Scottsdale and failed to disclose to Washington Mutual that the borrower also owned 6101 E. Sweetwater Avenue, Scottsdale and had a mortgage on it of $935,000.

2. The borrower KH bought 4607 W Augusta Avenue, Scottsdale and failed to disclose to Lehman Brothers that the borrower also owned 6101 E. Sweetwater Avenue, Scottsdale and had a mortgage on it of $935,000.

Borrower C.R. – Known by the editor (and confirmed by public record) to be Clint Rogers

1. The borrower CR bought 351 Palisades Drive, Sedona and failed to disclose to Washington Mutual that the borrower also owned 8301 N Merion Way, Paradise Valley and had a mortgage on it of $1,732,500.

2. The borrower CR bought 11014 N Miller Road, Scottsdale, AZ and failed to disclose to Washington Mutual that the borrower also owned 8301 N Merion Way, Paradise Valley and had a mortgage on it of $1,732,500.

3. 2. The borrower CR bought 7848 E Copper Canyon St, Mesa, AZ and failed to disclose to Washington Mutual that the borrower also owned 8301 N Merion Way, Paradise Valley and had a mortgage on it of $1,732,500 and also failed to disclose the two properties above with a further $2.2 million in outstanding mortgage loans.

Borrower A. Rogers - Known by the editor (and confirmed by public record) to be Angela Rogers the wife of Clint Rogers.

1. The borrower AR bought 8626 E San Alfredo Dr, Scottsdale and failed to disclose to Washington Mutual that the borrower also owned 3 properties on S 8^th Street, Cottonwood and had mortgages totaling $1.5 million.

2. The borrower AR bought 26247 N Paso Trail, Scottsdale and failed to disclose to America’s Wholesale lender that the borrower also owned 3 properties on S 8^th Street, Cottonwood and another at 8626 E San Alfredo Dr, Scottsdale and had mortgages totaling $2.13 million.

3. The borrower AR bought 8501 E Quarterhorse Trail, Scottsdale and failed to disclose to America’s Wholesale Lender that the borrower also owned 3 properties on S 8^th Street, Cottonwood and another at 8626 E San Alfredo Dr, Scottsdale and had mortgages totaling $2.13 million.

4. The borrower AR bought 8337 E Quarterhorse Trail, Scottsdale and failed to disclose to IndyMac Bank that the borrower also owned 26247 N Paso Trail, Scottsdale, 8501 E Quarterhorse Trail, Scottsdale and 8626 E San Alfredo Dr, Scottsdale and had mortgages totaling $2.52 million.

5. The borrower AR bought 8621 E San Ardo, Scottsdale and failed to disclose to IndyMac Bank that the borrower also owned 26247 N Paso Trail, Scottsdale, 8501 E Quarterhorse Trail, Scottsdale, 8337 E Quarterhorse Trail, Scottsdale and 8626 E San Alfredo Dr, Scottsdale and had mortgages totaling $3.16 million.

6. The borrower AR bought 8411 N 86^th Way, Scottsdale and failed to disclose to IndyMac Bank that the borrower also owned 8621 E San Ardo, Scottsdale, 26247 N Paso Trail, Scottsdale, 8501 E Quarterhorse Trail, Scottsdale, 8337 E Quarterhorse Trail, Scottsdale and 8626 E San Alfredo Dr, Scottsdale and had mortgages totaling $3.79 million.

7. The borrower AR bought 9077 N 82dn St, Scottsdale and failed to disclose to Metrocities Mortgage that the borrower also owned 8411 N 86^th Way, Scottsdale, 8621 E San Ardo, Scottsdale, 26247 N Paso Trail, Scottsdale, 8501 E Quarterhorse Trail, Scottsdale, 8337 E Quarterhorse Trail, Scottsdale and 8626 E San Alfredo Dr, Scottsdale and had mortgages totaling $5.0 million.

8. The borrower AR bought 10410 N 77^th Street, Scottsdale and failed to disclose to Washington Mutual that the borrower also owned 9077 N 82dn St, Scottsdale, 8411 N 86^th Way, Scottsdale, 8621 E San Ardo, Scottsdale, 26247 N Paso Trail, Scottsdale, 8501 E Quarterhorse Trail, Scottsdale, 8337 E Quarterhorse Trail, Scottsdale and 8626 E San Alfredo Dr, Scottsdale and had mortgages totaling $5.0 million.

In addition Nevada records (see above) show that on 4/4/2008 Global Mortgage LLC dba Like Financial and Suzanne Like were ordered to cease and desist unlicensed brokering activity and to pay an administrative fine in the amount of $250,000.00.

In the following press release Michael W. Reap, Acting United States Attorney for the Eastern District of Missouri announced that Aaron Duncan, the former CEO and owner of The Duncan Group, was indicted on multiple charges involving a multi-million dollar investment scheme.

The indictment alleges that Aaron Duncan and The Duncan Group took in millions in investor money, purchased only a small number of properties, and caused investors to lose more than $2,500,000 in investments.

Duncan owned, operated and was affiliated with several businesses that were generally operated under the umbrella and name The Duncan Group with offices in St. Charles and Chesterfield, Missouri. The Duncan Group held itself out as being in the business of buying, rehabilitating and selling real estate, including foreclosed properties, and also claimed to be involved in buying rental property and commercial real estate.

According to the indictment, beginning in December 2005, Duncan was experiencing personal financial problems, including falling behind on the mortgage payments on his personal residence. Despite these problems, Duncan held himself and his businesses out as being successful. Beginning in 2006 and continuing until October 2008, Duncan operated a fraudulent investment scheme where he solicited individuals to invest in real estate ventures with The Duncan Group. The indictment alleges that the scheme operated as a pyramid and Ponzi-style investment scheme in which earlier investors were routinely paid returns on their investments using funds obtained from subsequent investors, rather than from returns on legitimate investments, such as the sale of real estate. The scheme created a false appearance of a successful investment strategy, and had the intended effect of luring new investors and enticing existing investors to make additional investments.

Duncan provided false presentations to investors and potential investors by telling them they would be paid high rates of return on their investments, often in a relatively short period of time. In reality The Duncan Group relied on new investors’ money to stay afloat. The indictment alleges that Duncan falsely told investors that their investments were secured by deeds to real property.

The indictment alleges that Duncan failed to disclose to investors and potential investors that The Duncan Group had not purchased and sold enough properties to produce the interest rates represented and promised, and that interest payments were routinely made from other investors’ principal and not from real estate transactions and investments.

Finally, the indictment charges that Duncan often used investors’ principal to pay himself and to pay for personal expenses, including his personal mortgage, rather than using such money to invest in real estate. Aaron Duncan and The Duncan Group took in millions of dollars in investor money, purchased only a small number of properties, and caused investors to lose more than $2,500,000 in investments. Many investors in the scheme lost all or a substantial percentage of the principal that they invested with The Duncan Group.

“People should diligently check out claims of unusually high rates of return before investing,” said Toni Weirauch, Special Agent in Charge of IRS-Criminal Investigation.”Investors should not blindly follow the advice of any one person and should get asecond opinion.”

“Investors must be wary about any claims of high rates of return,” said J.R. Ball, AIC, St. Louis Postal Inspection Service. He added, “When statements or sales materials arrive in the mail, carefully scrutinize them for errors or inconsistencies, even if you have already invested.”

“We will investigate individuals who empty the pockets of unsuspecting investors,” said John V. Gillies, Special Agent in Charge of the FBI in St. Louis. “High dollar frauds and other white collar crimes continue to be one of our top priorities. The FBI and its law enforcement partners are committed to protecting the interest of American investors and prosecuting the scam artists who prey on them.”

“I am pleased the U.S. Attorney took this step,” Missouri Secretary of State Robin Carnahan said. “Duncan took millions from Missourians looking for a safe place to invest their savings.That type of deceit has no place in Missouri. My office will continue to work closely with the U.S. Attorney’s Office to ensure those who prey on Missouri investors are stopped and punished.”

AARON DUNCAN, Defiance, Missouri, was indicted by a federal grand jury on four felony counts of wire fraud, seven felony counts of mail fraud and nine felony counts of money laundering.

If convicted, each count of mail and wire fraud carries a maximum penalty of 20 years in prison and/or fines up to $250,000; each count of money laundering carries a maximum penalty of ten years in prison and/or fines up to $250,000.

Reap commended the work performed on the case by the Internal Revenue Service-Criminal Investigation, Postal Inspection Service, Federal Bureau of Investigation and the Securities Division of the Missouri Secretary of State; and Assistant United States Attorney John Bodenhausen, who is handling the case for the U.S. Attorney’s Office.

The charges set forth in an indictment are merely accusations, and each defendant is presumed innocent until and unless proven guilty.

In the following press release the Georgia Department of Banking and Finance announced that on August 24, 2009, the Notice of Intent to Revoke Annual License issued by the them became final against Advanced Funding Services, Inc., mortgage broker’s license number 19851, located at 3296 Summit Ridge Parkway, Suite 1210, Duluth, Georgia 30096.

The Notice of Intent to Revoke Annual License provided, among other things, that the Department has evidence that Advanced Funding Services, Inc. made false statements or misrepresented material facts to lenders and failed to properly maintain a mortgage loan transaction journal.
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Additional Materials

• Advanced Funding Service - [Press Release] [Final Order]
• Soon Hyung Park - [Press Release] [Final Order]

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Pursuant to state law, it is prohibited for any person knowingly to purchase, sell, or transfer a mortgage loan or loan application from or to a mortgage broker or mortgage lender that is not licensed or exempt from licensing or registration provisions.

In conjunction with these same violations, the Department issued an Order to Cease and Desist to Soon Hyung Park (aka Seth Park), president of Advanced Funding Services, Inc. The Order to Cease and Desist also became final on August 24, 2009.

Pursuant to state law that was in effect when the violations underlying the Order to Cease and Desist were committed, the Department may revoke the license of a mortgage broker or lender that employs an individual against whom a final Order to Cease and Desist has been issued within the preceding five years if the Order resulted from conducting mortgage business with an unlicensed person or committing prohibited acts.

Editor Note - On the same day the Department also issued Cease and Desist orders to 3 other people for “making false statements or misrepresenting material facts to lenders”. They are:

Kyung A. Lee (aka Lisa Lee aka Lisa Song) - [Press Release] [Final Order]

Jean Song (aka In S. Song) - [Press Release] [Final Order]

Mi Ae Li (aka Andrea Kim) - [Press Release] [Final Order]

In the following press release Ralph J. Marra, Acting United States Attorney for the District of New Jersey announced that a Jersey City man pleaded guilty today to committing bankruptcy fraud. Roland Smith, 41, pleaded guilty before U.S. District Chief Judge Garrett E. Brown, Jr., to a one-count Information that charges him with bankruptcy fraud. Judge Brown continued the defendant’s release on a $150,000 bond pending sentencing, which is scheduled for Dec 7.

At his plea hearing, Smith admitted that on Oct. 31, 2003, he obtaining a $137,750 residential mortgage loan for a Jersey City property using a false name and social security number. Smith admitted that on the loan application, he indicated that his name was “Ronald Smith.”

Smith admitted that he later defaulted on the mortgage payments and foreclosure proceedings commenced by the mortgage lender. Furthermore, Smith admitted that on July 13, 2005, he filed a bankruptcy petition under the false name and social security number in an attempt to reorganize and discharge the fraudulently-obtained debt.

The charge of bankruptcy fraud carries a maximum sentence of five years in prison and a fine of $250,000, along with an order of restitution.

In determining an actual sentence, Judge Brown will consult the advisory U.S. Sentencing Guidelines, which provide appropriate sentencing ranges that take into account the severity and characteristics of the offense, the defendant’s criminal history, if any, and other factors. The judge, however, is not bound by those guidelines in determining a sentence.

Parole has been abolished in the federal system. Defendants who are given custodial terms must serve nearly all that time.

Marra credited the staff of Roberta DeAngelis, the Acting U.S. Trustee for the District of New Jersey and Special Agents of the Social Security Administration/Office of the Inspector General, with developing the case against Smith.

The government is represented by Assistant U.S. Attorney Gallucio of the U.S. Attorney’s Commercial Crimes Unit in Newark.

In the following press release Stan Harris, Acting U.S. Attorney for the Southern District of Mississippi, U.S. Trustee R. Michael Bolen, and FBI Special Agent in Charge Frederick T. Brink announced that Robert E. Power, Jr. pled guilty in U.S. District Court today to conspiracy to commit bank and wire fraud, and bankruptcy fraud. Deaundrea Power pled guilty to misprision of a felony for failing to report bankruptcy fraud committed by Robert E. Power, Jr.

Robert E. Power, Jr. and his wife, Deaundrea Power, doing business as Yorkshire Financial Services, targeted homeowners at risk of foreclosure, representing to the homeowners that in exchange for transfer of their property to Yorkshire and a monthly rental payment, Yorkshire would negotiate mortgages or refinance mortgages to allow the homeowner to remain in their home. The Powers would then place the property in bankruptcy unbeknownst to the homeowners and either the home would eventually be foreclosed upon, or sold through straw buyers, via fraudulent loans where the Powers would obtain cash money from the sale. As a result of the Powers’ actions, the homeowners lost their homes while the Powers gained a profit from the fraudulent activity.
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Additional Materials

• Press Release
• Indictment

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The indictment shows that two of the properties involved were:
5117 Ridgewood Road, Jackson, MS
211 Alice Scott Drive, Canton, MS

Both properties subsequently went into foreclosure.

The Powers are scheduled to be sentenced on November 5, 2009 at 9:00 a.m. before U.S. District Judge Tom S. Lee. Robert Power faces a maximum penalty of 10 years in prison and a $250,000 fine, while Deaundrea Power faces up to three years in prison and a $250,000 fine.

In the following press release Karen L. Loeffler, United States Attorney for the District of Alaska announced that on August 21, 2009, lead defendant Lance Lockard was sentenced to 70 months in prison for his leadership of a largescale mortgage fraud scheme.

Lockard was the ninth and last defendant to be sentenced for his role in the largest mortgage fraud investigation in Alaska’s history. In total, nine individuals and one corporate defendant were convicted and sentenced for their roles in a widespread, three-year long scheme to defraud some 13 mortage lenders and banks in 57 different loan transactions netting over $1,700,000 in profits and over $2.5 million in losses to the financial institutions. United States District Court Judge Ralph Beistline, who presided over the case, sentenced the nine defendants to a total of 14 and ½ years of imprisonment, and imposed fines of over $90,000 and restitution of over $2.5 million dollars.

The defendants convicted as a result of the scheme are: Lance Lockard, of Anchorage, age 34, Gary Paterna, of Anchorage, age 62, Charles Carlson, of Anchorage, age 74, Holli Stroud, of Chugiak, age 30, Jonathan Ruf, of Anchorage, age 33, Keith Facer, of Anchorage, age 41, Don Murray, of Anchorage, age 35, Cerise Sanders, of Anchorage, age 31, and Alaska State Mortgage Company, Inc., of Anchorage.

Lockard, a licensed real estate investor and the lead defendant pled to 64 counts and was sentenced to 70 months and ordered to pay 2.5 million in restitution. Lockard also admitted the forfeiture allegation in an additional count, forfeiting his interest in $116,000 held in an investment account under his name.

Charles Carlson, a licensed real estate appraiser, was sentenced on July 11, 2009, to 24 months and to pay restitution of $2,360,185. Holli Stroud, a title company loan closer, was sentenced on June 25, 2009, to 18 months and to pay restitution of $403,733.60.

Keith Facer, a licensed real estate agent, was sentenced on May 29, 2009, to 16 months and to pay restitution of $221,065.24. Don Murray, a licensed real estate agent, was sentenced on May 19, 2009, to 21 months and pay restitution of $493,868.77.

Cerise Sanders, a loan originator, was sentenced on May 19, 2009, to 12 months and one day.

Jonathan Ruf, was sentenced on May 28, 2009, to 12 months and one day and to pay restitution of $1,066.390.

Gary Paterna (Mr. Lockard’s father-in-law) was sentenced on May 18, 2009, to three days in jail and pay restitution of $1,162,884.86.

Alaska State Mortgage, a local mortgage company, was sentenced on May 13, 2009, to a fine of $91,478.53.

The defendants pled to a total of 64 counts charging conspiracy, wire fraud, bank fraud, and false statements to a financial institution.

The pleas and sentencing bring to a close the largest mortgage fraud scheme ever prosecuted in the District of Alaska. The fraud was perpetrated by professionals in all areas of the real estate industry. Between on or about December 23, 2003, and May 31, 2006, Lockard and his co-defendants arranged to purchase and sell real estate in Alaska, and to obtain mortgage loans for the purchase and sale of that real estate, through a series of fraudlent schemes that relied upon false and fraudulent statements, inflated appraisals, falsified down payments, nominee borrowers and purchasers, hidden cash-back payments and other improper practices that concealed the true details of the financial transactions from the mortgage lenders involved. The effect and result of this conduct was to transfer the investment risk from Lockard and the other co-conspirators to the mortgage lenders and to provide inflated profit and fraudulently obtained loan funds to Lockard and the other co-conspirators. The charges in the indictment to which the defendants pled guilty outlined a total of five separate schemes, involving properties in numerous Anchorage subdivisions, and two large undeveloped properties in the Talkeetna area.

According to the indictment, in the first scheme, Lockard, Paterna, his father-in-law, Carlson, the appraiser and Stroud, the loan closer, arranged for fraudulent loan documentation on the purchase of 10 properties. The indictment alleges that Lockard arranged for the simultaneous purchase and sale of the properties using Paterna as a nominee purchaser and that Carlson inflated the appraisals of the properties with Stroud falsifying the closing documents to conceal the fact that no down payments had been made.

The second scheme in the indictment charges that Lockard and Ruf with the aid of Carlson, Stroud and Cerise Sanders, and Alaska State Mortgage Company as loan originators arranged for Ruf, acting as a nominee for Lockard, to purchase13 separate properties on the same day, with all purchases fraudulently listed as purchases of his primary residence by Sanders and McCready acting for Alaska State Mortgage.

According to the indictment, Carlson and Stroud, as in scheme one, inflated the appraisals and falsified loan closing paperwork. The indictment further alleges that the defendants, acting on behalf of Lockard sold the properties obtained through the fraudulent loans listed in schemes one and two to third-party buyers using further inflated appraisals provided by Carlson and illegal cash-back payments to the buyers aided by real estate agents Keith Facer and Don Murray to induce them to purchase the overpriced properties.

The indictment further alleges that Lockard, Stroud, Carlson, Ruf and Paterna engaged in similar fraud involving two other property purchases. It charges that Stroud and Lockard with the aid of an inflated appraisal provided by Carlson, arranged for Stroud to purchase a property with a falsified down payment. It further charges that Lockard, Paterna, Carlson, Stroud and Ruf again used nominees and falsified loan paperwork in a purchase financed by FNBA. Finally, the indictment alleges that Lockard engaged in a “bust out” scheme by purchasing properties with the aid of Paterna, Ruf and Carlson, at inflated prices with the purpose of taking the loan proceeds and defaulting immediately on the loans.

[Editor Note - The properties mentioned in the indictment are:

8120 Little Dipper Avenue, Anchorage
8151 Little Dipper Avenue, Anchorage
8210 Little Dipper Avenue, Anchorage
8141 Northwind Avenue, Anchorage
8150 Northwind Avenue, Anchorage
8151 Northwind Avenue, Anchorage
5163 South Emerald Way, Anchorage
501 Glacier Bay Circle, Anchorage
530 Glacier Bay Circle, Anchorage
541 Glacier Bay Circle, Anchorage
521 Misty Fjords Circle, Anchorage
510 Bitterroot Circle, Anchorage
520 Bitterroot Circle, Anchorage
521 Bitterroot Circle, Anchorage
530 Bitterroot Circle, Anchorage
531 Bitterroot Circle, Anchorage
540 Bitterroot Circle, Anchorage
541 Bitterroot Circle, Anchorage
520 San Juan Circle, Anchorage
521 San Juan Circle, Anchorage
530 San Juan Circle, Anchorage

531 San Juan Circle, Anchorage
540 San Juan Circle, Anchorage
541 San Juan Circle, Anchorage. ]

At Friday’s sentencing hearing, Judge Beistline concluded that Lockard was an organizer and leader of the criminal activity, that he had fraudeulently obtained more than $1 million in gross proceeds from the First National Bank of Alaska, and that his crimes caused total losses of approximately $2.5 million dollars. Judge Beistline commented that Mr. Lockard’s crimes were motivated by greed and had an impact on our community. In addition to the financial institutions that were defrauded, one of the individual victims testified at setencing about his personal financial losses, and his struggles to pay the mortgages on three duplexes he had unwittingly purchased for grossly inflated prices. Judge Besitline admonished that there was “no excuse for lying and deception, and no excuse for breaking the law,” and that Mr. Lockard was going to have to “face the consequences of the very poor choices he made.”

United States Attorney Karen L. Loeffler noted that these convictions and sentences point out the vast harm that can be done to an industry and the public when a handful of dishonest individuals are willing to falsify the documents and information on which the mortgage market relies.

Ms. Loeffler also commended the diligent and extensive investigation by special agents of the Federal Bureau of Investigation for their investigation that lead to this result.

In the following press release B. Todd Jones, United States Attorney for the District of Minnesota announced that a 36-year-old Park Rapids man was indicted last week in federal court in connection with a scheme to defraud a mortgage company out of money, as well as growing more than 100 marijuana plants. Eric Wayne Moen was charged Aug. 18 with one count of conspiracy to commit wire fraud, one count of money laundering and one count of manufacturing marijuana. He made his initial appearance Aug. 21.

Moen’s indictment alleges that from Aug. 1 through Nov. 28, 2005, he conspired with others to obtain the funds to purchase a single-family home by means of false and fraudulent pretenses. Specifically, Moen, a licensed real estate agent at the time, is alleged to have conspired to misrepresent the employment status of a borrower in connection with a mortgage. As part of the scheme, $641,840.63 was transferred on Nov. 28 via interstate wire from a mortgage company to a title company. Then, on Dec. 1, 2005, Moen allegedly deposited a $15,650.87 check into his personal account knowing that money was derived from the wire fraud. The residence allegedly purchased via the wire fraud was, the indictment states, subsequently used for a marijuana grow operation.
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Additional Materials

• Press Release
• Indictment

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Co-defendant Kevin Ray Winkelmann, 39, Shorewood, pleaded guilty in August 2008 to one count of conspiracy to commit mail fraud for his role in the mortgage fraud scheme [Click here for that Journal Entry]. The indictment also states that from in or about January 2006 through June 18, 2007, Moen knowingly manufactured 100 or more marijuana plants.

If convicted, Moen faces a potential maximum penalty of 10 years in prison on the money laundering count, 20 years on the conspiracy count and 40 years on the manufacturing count. All United States
sentences are determined by a federal district court judge.

This case is the result of an investigation by the Internal Revenue Service-Criminal Investigation Division and the United States Postal Inspection Service. It is being prosecuted by Assistant U.S. Attorney David M. Genrich.

In the following press release Joseph P. Russoniello, United States Attorney for the Northern District of California announced that John A. Bui pleaded guilty in federal court in San Francisco today to wire fraud conspiracy, destruction of records in a federal investigation and witness tampering.

In pleading guilty, Bui admitted that, in a scheme that began in 2003 and continued until approximately April 30, 2009, he defrauded mortgage lenders and financial institutions by providing false and fraudulent information in support of mortgage loan applications. Working out of an office in Milpitas, Calif., Bui and his employees assisted individuals who wanted to obtain mortgages from mortgage lenders so they could purchase residential properties in the Northern District of California and elsewhere.
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Additonal Materials

• Press Release
• Criminal Complaint
• Criminal Information
• Plea Agreement (not yet available)

The Information reveals that Bui ran a company called JB Financial Group

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As a part of this scheme, Bui routinely transmitted fraudulent loan applications to mortgage lenders. Those loan applications contained false employment information and false and inflated income and bank account information, which was intended to inflate the borrowers’ creditworthiness. In addition, the loan applications were supported by false and forged documents that purported to verify the borrowers’ employment, income and assets. Bui, and other members of the scheme, used a network of co-conspirators who agreed to pose as the borrowers’ employers and falsely verify to the mortgage lenders the accuracy of the employment and income information listed on the loan applications. As a result of Bui’s participation in this conspiracy he illegally earned no less than $3.5 million.

Bui, 46, of San Jose, Calif., also admitted at the time of his guilty plea that on or about May 2, 2009, after learning that agents of the Federal Bureau of Investigation had executed a search warrant on the San Francisco office of a co-conspirator, he destroyed and caused to be destroyed substantially all of the loan files in his possession with the intent of preventing the FBI from obtaining evidence of his mortgage fraud activities.

Bui also admitted that on or about May 28, 2009, he caused a letter to be delivered to an individual located within the Northern District of California who he believed was cooperating with the FBI’s investigation. Bui’s letter asked the individual not to provide information to the FBI agents assigned to the investigation.

Bui, who is currently in custody, is scheduled to be sentenced on November 6, 2009, before U.S. District Court Judge Susan Illston in San Francisco. The maximum statutory penalty for wire fraud in violation of Title 18, United States Code, Section 1349 is 30 years and a fine of $1 million. The maximum statutory penalty for destruction of records in a federal investigation in violation of Title 18, United States Code, Section 1519 is 20 years and a fine of $250,000. The maximum statutory penalty for witness tampering in violation of Title 18, United States Code, Section 1512(b)(3) is 20 years and a fine of $250,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Pursuant to the plea agreement, Bui has agreed to forfeit $3.5 million to the United States.

Four other individuals have been charged in connection with the case.

[Editor Note. we are trying to obtain details of the other individuals]

Jeffrey Finigan and Jeffrey Rabkin are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Elizabeth Garcia and Rayneisha Booth. The prosecution is the result of an investigation by the Federal Bureau of Investigation.

In the following press release Lawrence J. Laurenzi, United States Attorney for the Western District of Tennessee announced that an indictment was returned today (18/9/09) against Michael Lusk [aka Michael Hunter and Michael Williams], Mykisha Williams, Gloria Buntyn, Keith Threatt and Melanie Wilkes on charges of conspiracy, mail, wire, and bank fraud arising from their involvement in a“flipping scheme” announced Lawrence J. Laurenzi, United States Attorney for the Western District of Tennessee.

According to the indictment, between approximately February 2003, and March 2008, Lusk who owned and operated several companies, recruited defendant Williams (his wife), and defendants Buntyn, Threatt and others (“the Sellers”) to purchase residential properties in Shelby County, Tennessee. The Sellers would then “flip” the properties to “Straw Buyers” including defendant Wilkes for substantially more than the Sellers had originally paid. Lusk arranged for mortgage loan financing in the names of the Straw Buyers to finance the purchases of the properties from the Sellers. In order to qualify the Straw Buyers for the loans, Lusk and others would submit false, fraudulent and fictitious loan underwriting and closing documents.
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Additional Materials

• Press Release
• Lusk et al Indictment
• McCasland Information
• McCasland Plea Agreement

The indictment gives the following additional information:
Lusk operated Challenge Mortgage, Wolfcrest Property Management, First Performance, Southern California REO, and Four Star Management.

Wilkes closed real estate transactions for various title companies including Blue Grass Title and First National Financial.

Williams, Buntyn and Threatt were sellers of properties involved in the alleged scheme

The properties mentioned in the indictment are:
744 Melrose, Memphis
61 W. McKellar, Memphis
1417 N. Bellevue, Memphis
128 W. Davant, Memphis
1486 Stevenson, Memphis
1235 Chickamauga, Memphis
1119 Kney, Memphis
250 W. Brooks Road, Memphis
144 W. Person, Memphis
1164 Canary Lane, Memphis
3676 Skylark, Memphis
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The indictment also alleges that Rex McCasland, an appraiser who has previously entered a guilty plea to a criminal information charging him in the conspiracy, prepared appraisals containing false statements regarding the value and condition of some of the properties.

The indictment also alleges that in addition to acting as a Straw Buyer, defendant Wilkes, who was commissioned as a Notary Public, notarized signatures of other Straw Buyers on closing documents when the Buyers were not present at the closing.

Lusk was also charged with two counts of money laundering. The indictment seeks forfeiture of $12 million, two residential properties purchased by Lusk, several vehicles, and two Rolex watches.

This case was part of a joint investigation by the United States Secret Service, the Federal Bureau of Investigation, and the United States Postal Inspection Service. The matter is being prosecuted by Assistant U.S. Attorney Carroll André.

In the following press release Sheldon J. Sperling, United States Attorney for the Eastern District of Oklahoma, announced today that Gerald Wayne Snow, Sr., a/k/a Gerald Snow, age 68, of Broken Arrow, Oklahoma, Gerald Wayne Snow, Jr., a/k/a Jerry Snow, age 40, of Tulsa, Oklahoma, Ayo Dineji Olaniyan, age 33, of Joplin, Missouri, and Giale Diana Cates, age 37, of Tulsa, Oklahoma were arraigned on the charge of Conspiracy to Commit Wire Fraud, in violation of Title 18, United States Code, Section 1349 and Criminal Forfeiture pursuant to Title 18, United States Code, Section 982.

“Charges arose from an investigation by the Federal Bureau of Investigation. The Indictment alleges that Gerald Snow and his son Jerry Snow built and sold houses in Wagoner County. Gerald Snow and Jerry Snow built and sold houses in Wagoner County. Gerald Snow and Jerry Snow conspired with Olaniyan, Cates and others to defraud mortgage lenders to loan money on homes sold by the Snow’s. The defendants solicited and induced buyers by promising to pay down payments, closing costs and provide cash back to the buyers after closing. In order to get the mortgage lenders to loan funds, the defendants conspired to submit false loan applications and inflated the purchase prices of the homes,” stated U.S. Attorney Sperling.
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Additional Materials

Press Release
Indictment

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Editor Note:

The indictment contains the following information:
Gerald Snow, Sr is the President of Storybook Homes, Inc
Gerald Snow, Jr is the incorporator of C&J Homes, Inc
Olaniyan was an agent or employee at Key Mortgage Corporation
Cates was an agent or employee at Olympia Funding

Properties mentioned in the indictment are:
13666 South 262nd East Avenue, Coweta, OK
13838 South 262nd East Avenue, Coweta, OK
14040 South 262nd East Avenue, Coweta, OK
21222 East 61st Street, Broken Arrow, Ok

“Gerald Snow, Jerry Snow and Gaile Diana Cates entered pleas of not guilty before the Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee.Ayo Dineji Olaniyan entered a plea of not guilty before the Honorable Steven P. Shreder, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee. The case was set for jury trial on October 5, 2009 before the Honorable Ronald A. White, United States District Judge, and the defendants were released pending trial.”

“The statutory range of punishment is not more than twenty years imprisonment, and/or up to $250,000.00 in fines,” stated U.S. Attorney Sperling.

Assistant United States Attorney Christopher J. Wilson represents the United States in this matter.

The named individuals have been charged with a federal crime or crimes by the return of an indictment by the Grand Jury. A grand jury Indictment does not constitute evidence of guilt. A grand jury Indictment is a method of bringing formal charges against the defendant. A defendant is presumed innocent of the charges and may not be found guilty unless evidence establishes guilt beyond a reasonable doubt.

In the following press release the Office of the United States Attorney for the District of Arizona announced that Jake David Abegg Whitman, 33, of Mesa, Ariz., pleaded guilty on August 18, 2009, to one count of Conspiracy to Commit Bank Fraud and seven counts of Bank Fraud. Whitman played a leadership role in the underlying conspiracy, which involved 19 unimproved residential properties in the greater Phoenix area. The objective of the conspiracy was to obtain mortgage loans that were substantially larger than the actual value of the properties—often by hundreds of thousands of dollars. Whitman owned 10 of the properties and served as branch manager of the mortgage broker, Academy Mortgage, that processed the loans.

As part of the conspiracy, Whitman worked with a hand-picked appraiser to obtain inflated appraisals for the properties. He also recruited buyers to purchase the properties at those inflated prices. The buyers typically lacked the income and assets to provide the down-payment or to make the mortgage payments. To overcome this, Whitman secretly supplied the down-payment to the buyers (without disclosing this arrangement) and also provided “cash back” to the buyers at closing. The properties eventually went into foreclosure and cost lending institutions nearly $1,000,000 in losses.
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Additional Materials

• Press Release
• Indictment
• Plea Agreement

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Whitman is cooperating with authorities in the prosecution of others.

Editor Note.

According to the indictment there are 5 other defendants in this case:

1. Jeffrey Crandell, a loan officer at Academy Mortgage
2. Kurt Douglas Holm, an appraiser
3. Erin Leastman, an escrow officer at Stewart Title and then Academy Mortgage
4. Fred Crum, a loan officer at Academy Mortgage
5. Tyson Young, a buyer and seller of some to the properties.

The properties mentioned in the indictment are:

Lot A-2, S 204th Street
Lot A-3, S 204th Street
Lot A-4, S 204th Street
Lot B-2, San Tan Boulevard
Lot B-5, San Tan Boulevard
Lot 3, Chandler Heights
Lot 4 Parcel A, East Stacey Road
Lot 4 Parcel B, East Stacey Road

End]

Sentencing is set before U.S. District Judge G. Murray Snow on October 26, 2009. Each conviction for Conspiracy to Commit Bank Fraud and Bank Fraud carries a maximum penalty of 30 years in federal prison, a $1,000,000 fine, or both. In determining an actual sentence, Judge Snow will consult the U.S. Sentencing Guidelines, which provide advisory sentencing ranges. The judge, however, is not bound by those guidelines in determining a sentence.

Whitman’s plea is part of an initiative called “Operation Cash Back” in which 40 defendants were indicted and arrested, including many real estate professionals, in June 2008. To date, 18 have entered guilty pleas.

The investigation in this case was conducted by the Federal Bureau of Investigation. The prosecution is being handled by Kevin M. Rapp and Dominic Lanza, Assistant U.S. Attorneys, District of Arizona, Phoenix.

San Diego County District Attorney Bonnie M. Dumanis today asked [Press Release] for the public’s help in locating a defendant who failed to appear at his trial in a Southbay courtroom on Monday, August 3rd to face robbery, residential burglary and grand theft charges. If convicted on all counts in that case, Simmons could be sentenced to 12 years in state prison.

In a separate case, Simmons is scheduled to appear for trial at the Hall of Justice on Monday, August 10th to face 18 felony counts including extortion, criminal threats, conspiracy, forgery and filing false document charges. The real estate fraud charges stem from allegations that Simmons filed bogus grant deeds on properties he did not own. Simmons faces up to 16 years and 8 months in state prison if convicted of all the real estate fraud-related charges in that case.

A felony warrant has been issued for Simmons’ arrest in the Southbay case. Simmons is known to frequent the East San Diego and Chula Vista areas. Anyone with information about his whereabouts is asked to call Chula Vista Police Department at (619) 691-5151.

MAURICE ANTIONE SIMMONS

Male, 5’11”, 250 lbs., Date of Birth 6-22-77, Age: 32, brown hair, brown eyes

In the following press release the Georgia Department of Banking and Finance announced that on August 14, 2009 the Department’s Notice of Intent to Revoke Annual License issued to Pacific Reverse Mortgage, Inc. d/b/a Financial Heritage, license number 20269, located at 9275 Sky Park Court, #125, San Diego, California 92123, became final.

The Notice of Intent to Revoke Annual License provided that Pacific Reverse Mortgage, Inc. d/b/a Financial Heritage failed to disburse funds in accordance with a written commitment or agreement to make a mortgage loan and engaged in any transaction, practice, or course of business that is not in good faith or fair dealing, or which operated a fraud upon any person, in connection with the attempted or actual making of, purchase of, or sale of any mortgage loan.

Pursuant to state law, it is prohibited for any person knowingly to purchase, sell, or transfer a mortgage loan or loan application from or to a mortgage broker or mortgage lender that is not licensed or exempt from licensing or registration provisions.

In the following press release Ventura County District Attorney Gregory D. Totten announced that Veronica Sanchez Gallegos (10/30/80), a licensed real estate agent residing in Ventura , pled guilty on August 6, 2009, to one felony count of theft from an elder, five felony counts of grand theft, and admitted a special allegation of taking more than $500,000.

In an investigation conducted by the District Attorney’s Office Bureau of Investigation, it was determined that Gallegos conducted a fraudulent investment scheme where six victims entrusted her with a total $1,289,000. Victims invested money with Gallegos after relying on false assurances made by Gallegos that their investments were being pooled into short term construction, real estate, and similar “secured” loans by a corporation named Equity One and were protected by an escrow fund in the event of default. Gallegos made other false representations including that she was an “Accredited Investor” as defined by the Securities and Exchange Commission, earned income in excess of $200,000 per year, had a net worth in excess of one million dollars and that she personally guaranteed every investment.

One 65 year-old victim invested the bulk of his life savings for a total of $284,000 and suffered a net loss of $244,000. Other investors invested amounts ranging from $40,000 to $622,000. Investors typically responded to e-mail solicitations from Gallegos where they were promised returns of principal plus monthly payments and thousands of additional dollars. For example, one investor gave $68,000 to Gallegos in exchange for a “loan agreement” promising the payment of $1,041 per month for 24 months, followed by a payment of $80,500, with ten percent interest charged on any amounts not paid in full. While some investors did receive a small proportion of their funds back, the net losses suffered by all investors are estimated at $1,238,706.

Gallegos operated under business names Home Center Realty and Loans and Home Center Loans of Ventura. The investigation revealed that such businesses handled very few legitimate real estate transactions. To date, no funds have been recovered and it appears that the proceeds were spent by Gallegos. In one instance, the day after receiving $193,000 from one investor, Gallegos used $25,000 to purchase a truck from a local auto dealer. Gallegos admitted the wrongful conduct, expressed remorse for the victims and indicated that she will accept responsibility for her actions.

Gallegos faces a maximum prison term of 12 years, 4 months. Her sentencing hearing is set for October 7, 2009 before Superior Court Judge Edward Brodie. Gallegos remains out of custody on $30,000 bail pending the sentencing hearing.

Hayung Peter Jin, age 46, of Centerville, Va., pleaded guilty today to multiple fraud charges. Dana J. Boente, United States Attorney for the Eastern District of Virginia, and Joseph Persichini, Jr., Assistant Director in Charge of the FBI Washington Field Office, made the announcement after the plea was accepted by United States District Judge James C. Cacheris.

Jin was indicted on June 11, 2009, on multiple fraud charges, including aggravated identity theft. Sentencing has been set for Nov. 13, 2009. Jin faces a maximum penalty of 30 years in prison.
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Additional Materials

• Press Release
• Indictment
• Statement of Facts
• Plea Agreement

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In a statement of facts filed with his plea agreement, Jin admitted that he operated a loan brokerage business, known as Business Capital and Investments, Inc., located in Annandale, Va., that served primarily Korean Americans in the Washington metropolitan area. According to the statement of facts, Jin was involved in two separate fraud schemes. In October 2005, Jin convinced a former client to sell his Loudoun County home to another person, a South Carolina businessman named Han, when in fact Han had never agreed to purchase the home. Jin then used Han’s name and social security number to obtain financing for the apparent purchase of the home, plus additional home equity loans on the home in the name of Han. The total amount of fraudulently obtained financing was $620,000.

In connection with the second scheme, in January 2007 Jin convinced a local business woman that he had obtained four borrowers who wanted to borrow funds from her in the total amount of $360,000, when in fact the alleged borrowers had never agreed to such an arrangement. Jin forged four promissory notes and gave them to the business woman in order to induce her to transfer the $360,000 to him, with the intent that he (Jin) would transfer the funds to the four “borrowers.” In reality Jin kept the funds for himself.

This case was investigated by the FBI’s Washington Field Office. Assistant United States Attorney Stephen P. Learned prosecuted the case on behalf of the United States.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.usdoj.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on http://pacer.uspci.uscourts.gov.

In the following press release Dana J. Boente, United States Attorney for the Eastern District of Virginia announced that former attorney Kristina Marie Cardwell, age 39, of Virginia Beach, Va., was sentenced to 66 months in prison today for her participation in a mortgage fraud scheme, federal authorities announced. She was also sentenced to serve a three-year period of supervised release after her incarceration and to pay $708,339.60 in restitution. Cardwell pled guilty to committing wire fraud on Dec. 4, 2008, and was sentenced today by United States District Judge Raymond A. Jackson. On April 14, 2009, Cardwell consented to revocation of her license to practice law.

According to court documents, Cardwell was employed by law firms associated with co-defendant Troy Aurelius Titus for almost ten years. In a statement of facts filed with her plea agreement, Cardwell admitted that between May and October 2005 she purchased three residential properties in Virginia Beach from entities associated with Titus. She purchased the properties in her own name and received mortgages on the properties in her own name, although both she and Titus intended for Titus to retain control over the properties and sell them to third parties at a later time. The funds taken from Cardwell’s purchases were used to cover some of Titus’s financial obligations. Cardwell admitted that while applying for the mortgages, she made false statements about her income, assets and financial liabilities. During the application process, thousands of dollars were moved into Cardwell’s bank account to inflate her account balance then moved out of the account. In one instance, Cardwell authored a letter to a lender falsely claiming that she had received a $91,000 disbursement of funds from her firm.
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Additional Materials

• Press Release
• Indictment
• Cardwell Virginia Bar Revocation Order
• Titus Virginia Bar Orders 03-022-1772 , 03-022-3476 , 03-022-3706 , 03-022-3852 , 04-022-0381 , 05-022-0189 , 05-022-0235 , 05-022-0371 , 05-022-0537 , 05-022-2907 , 05-022-2966 , 05-022-3081 , 05-022-3879 , 05-022-3984 , 05-022-4402

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[Ed. note - The indictment alleges that Titus ran an investment scheme to which he attracted investors via “seminars” and ran numerous different companies which were involved in the real estate transactions.]

This case is being investigated by the Federal Bureau of Investigation and the Virginia State Corporation Commission with assistance from the Virginia State Bar and the Virginia Attorney General’s Office. Assistant United States Attorneys Michael C. Moore and Melissa E. O’Boyle are prosecuting the case on behalf of the United States.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.usdoj.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on http://pacer.uspci.uscourts.gov