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Mortgage Industry Fraud
Insights from Patrick Crowley

Archives June 19, 2005



June 16, 2005

A disbarred Georgia lawyer will do 135 days in a county jail for his role in a $1.23 million mortgage fraud case that involves 13 people.

James Avant, 42, of Bibb County, has also paid a $25,000 settlement, the Macon Telegraph is reporting. He pleaded guilty to conspiracy to commit racketeering and has been disbarred, according to the State Bar of Georgia.

Six other people in the fraud case have already been sentenced. The ring used inflated appraisals, phony loan apps and bogus documents to defraud mortgage companies on the sale of 22 properties between June 2000 and May 2004, according to prosecutors.

Tracy Ford Bryant, a loan originator, will be sentenced in June 21. Marcus Malcolm, owner of Agape Properties in Lithonia, Ga., will be sentenced June 30.

Georgia has had mortgage fraud problems; the FBI says it's among the worst in the nation for incidents of fraud. But the authorities, armed with a tough new law, are also cracking down on fraud.

read story from the Macon Telegraph

visit Georgia's State Bar Web site

This entry has been removed.

A love affair between a Tennessee mortgage broker and the owner of a title company bloomed into mortgage fraud and is now ending with the lovers headed off to prison.

Federal prosecutors say Ragip Sinan Mungan, the former operator of Mortgage Masters in West Knoxville, and Mary Catherine Jedlicka, operator of Accent Title, allegedly used fraud to secure loans to pay off mortgages that were never paid off.

Mungan, a Turkish immigrant, used his business to get the loans; Jedlicka used hers to do the title work and closings, according to the Knoxville News Sentinel.

Defense lawyer David Eldridge, who represented Mungan, reportedly said at the couple's sentencing that his clients love for Jedlicka led him astray.

Jedlicka's lawyer reportedly said that Jedlicka was a "needy woman who looked at Mungan as a protector and adviser" and it was him that led her into the scheme.

Either way, both are heading to prison for more than two years in a fraud that cost a Fidelity National Title Insurance, which insured the title work but did not know about the fraud, about $5 million in losses.

read story from the Knoxville News-Sentinel

June 15, 2005

Georgia's not kidding about getting tough on mortgage fraud.

Five people have been arrested and charged with mortgage fraud in Gwinnett County, an Atlanta suburb. Police say they allegedly used a phony appraisal to try and get a loan at a Countrywide Mortgage office in Lawrenceville, Ga.

The Atlanta Journal-Constitution reported that the gang tried to get a $5.5 million mortgage on a home that had a market value of $3.9 million. They were trying to pocket as much as $1.6 million from the scam.

The arrests are the second under Georgia's tough new Residential Mortgage Fraud Act. It was passed earlier this year by the state's legislature. The law was passed because Georgia has become a hot bed of mortgage fraud.

According to the state's attorney general's office Georgia led the nation in mortgage fraud crimes between 2000 and 2003.

The new law has a stiff penalty of up to 10 years in prison and a $5,000 fine for just a single offense of mortgage fraud.

read story from The Atlanta Journal-Constitution

Operators of a mortgage fraud ring that targeted more than 100 Latinos in Oregon are starting to cop pleas.

Five, including former mortgage brokers with Infinity Investments and City Lending, have pleaded to charges that include mortgage fraud, theft, racketeering and forgery, the News-Register in McMinnville, Oregon reported.

One other member of the ring is still negotiating a deal and two are taking their chances with a jury.

All eight were arrested in the spring after a month-long investigation into allegations that Latinos who don't speak English were being victimized by the fraud. The fraud went on for about two years and caused victims to lose homes and life savings.

Police have said the first-time homebuyers were duped into paying for fees and other services that were actually just alleged rip-offs.

The Newberg Graphic quoted a press release from the Yamhill County Sheriff saying that "during the attempt to purchase homes, the victims were required to pay cash for inspections, appraisals, credit checks, closing costs, origination fees and other similar transactions."

"No records of these cash payments were recorded and the victims were required to pay them a second time during the loan process," the sheriff reportedly said.

read story from The Newberg Graphic

read story from the News-Register

A south Florida mortgage loan processor has been busted for fraud and ID theft.

Anna Maria Brown won't go to jail, however. She's already served more than two years for the crimes. With her guilty plea will be given credit for time served along with 10 years probation and an order to pay back $35,000 to two lenders victimized by her fraud.

The South Florida Sun Sentinel reported that Brown and her daughter, Natalie Thorpe, stole the identity of a friend and used it to submit a loan application for an $185,000 home in a gated community.

The friend had given Thorpe her Social Security number after Thorpe offered to help her refinance a mortgage. The friend didn't even know about the theft until a mortgage company called asking her to sign some documents -- documents the friend knew nothing about.

Brown also allegedly tried to buy two other homes with stolen IDs.

Brown was classified by the court as a habitual felon as has been previously convicted of practicing medicine without a license and grand theft. The court may have been lenient because she has breast cancer, recently suffered a stroke and needs a wheelchair to get around, the paper reported.

Thorpe was given 15 years probation.

read story from the Sun-Sentinel

June 13, 2005

It's 23 and counting when it comes to convictions in an Ohio property flipping ring busted by federal prosecutors.

Mortgage broker Ronald Trester and homebuyer Timothy Husvar caused lenders to lose nearly $10 million and have pleaded guilty to fraud, conspiracy and tax evasion charges, according to a story in The Cincinnati Enquirer.

They were buying run down houses, using phony documents to inflate the values and then selling them quickly. Trester dodged $223,964 in income taxes between 1998 and 2001.

Convictions in this case have trickled out for months and it looks like more are coming. A mortgage broker, the owner of a mortgage company and the alleged ring leader of the scheme have all agreed to plead guilty, prosecutors said. Their sentences will be announced at a later date.

Trester and Timothy Husvar, who was involved as one of the buyers, face 40 years in prison and fines of $1.5 million.

read story from Cincinnati's The Enquirer

June 12, 2005

An alleged pawn in the massive mortgage fraud scheme run by Florida fugitive Matthew Cox has been sentenced to prison.

Eric Tamargo of the Tampa area was convicted as a "straw buyer" for using stolen identities to get mortgage loans on two pieces of property. Tamargo has pleaded guilty to federal fraud charges and must serve nearly two years in prison and repay $232,278, which is the amount he fraudulently borrowed.

A Social Security number Tamargo allegedly used was allegedly stolen from a 4-year-old girl.

Tamargo allegedly worked with Cox, who is still on the lam and wanted for running a mortgage fraud scheme that involved nearly 100 properties and millions of dollars in fraudulent mortgage loans, the St. Petersburg Times is reporting.

Cox, who was acquisitions director for a firm called Urban Equity, was on probation for mortgage fraud when a series of St. Petersburg Times articles dubbed "Dubious Deals" ran him out of town in December 2003. He briefly appeared in Atlanta last summer, where he and a female accomplice allegedly used stolen identities to pull off about $800,000 in mortgage fraud deals.

Police actually had Cox in custody last April but released him before learning his true identity.

read story from the St. Petersburg Times

The owners of a home improvement company, a bar, a cellular phone firm, a roofer and a computer company were among the 12 people charged by federal authorities in Illinois with trying to rip off HUD.

The "loan scam", as the FBI reportedly described it to television station WREX, involved the ring using fake and forged documents to get dupe HUD into making up to $2 million in bad loans.

Ring leader Douglas Hastings and his wife would allegedly buy cheap houses and then pay $500 to anyone referring a buyer to them. But the buyers couldn't have qualified for the loans, so Hastings allegedly worked along with Phillip Miskimon and Edward Martins in paying the $500 bounty to businesses that would provide false employment records for the buyers.

Authorities were tipped off by neighbors of some of the houses who noticed that the properties were changing hands every few months.

"If (people) see a property owned by one person, and six months later it's owned by someone else, and six months after that it's owned by a third person, they should pay attention because there could be something wrong," HUD special agent Barry McLaughlin reportedly told the TV station.

read story from 13 WREX NEWS

read story from 23 WIFR

read story from The Journal Standard

The owner of a New York mortgage company has been indicted by federal prosecutors in New Jersey for his role in what the feds are calling a mortgage fraud conspiracy.

Devon Bowie, 53, president of Neighborhood Mortgage Bankers Co. was charged along with real estate investor Barry Fauntleroy, the president of EON Institute, a real estate holding company, and two of Bowie's associates, Stacey Marrero and Sean Mason.

Bowie has been arrested but as of the weekend authorities were still looking for Fauntleroy.

The ring is accused of preparing fake loan applications and other supporting documents to make FHA loans to unqualified buyers through Bowie's company. Fauntleroy and Bowie were allegedly buying the properties beforehand and then selling them at steeply inflated prices to people who basically couldn't afford them.

The pair had promised buyers that improvements would be made on the houses in low income sections of New Jersey, but little work was ever completed, prosecutors said.

"These were master manipulators at work," U.S. Attorney Christopher J. Christie of Newark said in a statement. "A lot of people were hurt by these alleged con men, from the government which backed the fraudulent loans to low-income home buyers whose hopes and dreams were shattered by fraud."

read story from The Miami Herald

read announcement from the U.S. Attorney's Office

The illegal flipping of 26 pieces of property means prison time for a couple of south Florida men.

Rodney Way of Pembroke Pines and Juan Carlos Suarez of Miami have been convicted on multiple federal charges, including bank and mail fraud, the U.S. Attorney's office in Miami is saying.

The mode of deception was the same as in other flipping cases with Way and Suarez using phony job and personal information to get a mortgage loan. Stuart Blum, who the feds identified as a mortgage broker and the owner of Old Florida Mortgage, prepared and submitted the phony applications to a host of lenders on behalf of Way's cousin, Doyle Raynard Blum.

Blum was the alleged straw buyer in the scheme. That's an important element because most illegal flips can't happen unless someone agrees to either act as the buyer, or allows the use of their name, Social Security number and other personal financial information.

All of the loans eventually went into foreclosure, costing lenders millions.

Blum and Aaron have already pleaded guilty. Way and Suarez face up to 35 years in prison and fines of up to $2 million.

read story from The Miami Herald

read announcement from the Department of Justice

Kenneth Jenkins was not your average home rehabber.

Jenkins, 36, of Camden, N.J., would allegedly buy rundown homes with money he made selling drugs, pay handymen with crack to make a few repairs and then sell the homes with fraudulently obtained mortgages to buyers who had no idea what was going down.

The "house hustle," as federal prosecutors in New Jersey dubbed it, earned Jenkins a prison sentence of at least 30 years, the Philadelphia Inquirer is reporting.

Jenkins is described as a major east coast drug dealer who along with his girlfriend told more than $1 million of real estate. Jenkins said he was a legitimate businessman who struggled since the 9/11 terrorist attacks.

A federal judge and prosecutors said he was running the racket to launder drug money and routinely sold homes with faulty appliances, rats and even sewage seeping through the walls.

"You guys bought a house and moved out of Camden," U.S. District Judge Freda Wolfson reportedly told Jenkins and his girlfriend. "But you came back here and inflicted your harm, to sell drugs, and that deserves a substantial sentence."

read story from The Philadelphia Inquirer

read story from the Associated Press

read announcement from the Department of Justice

Patrick Crowley is fraud journalist for MortgageDaily.com and a reporter and columnist for The Cincinnati Enquirer.

Email Patrick at: PatCrowley@FraudBlogger.com
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