4:02PM

Another charged in "Promise Land Mortgage" case

In the following press release Susan W. Brooks, United States Attorney for the Southern District of Indiana, announced on October 26, 2006 that JOHN WAGNER, 46, Indianapolis, Indiana, was charged with crimes related to mortgage fraud activities in which he participated from late 2000 to early 2002, when he lived in Indianapolis, Indiana. According to the Information filed today, WAGNER participated with other individuals in fraudulently obtained over $4,000,000 in loans from a Michigan lending institution by submitting false loan applications, fraudulent financial documents, and falsely inflated appraisals for the purpose of obtaining mortgage loans.

WAGNER was charged with one count of conspiracy to commit mail fraud and one count of money laundering. Today’ s charges follow an investigation by special agents of the Internal Revenue Service and the Federal Bureau of Investigation, working as part of the Southern District of Indiana Mortgage Fraud Task Force.

According to the charges, Romero Brice (who plead guilty in September of this year to related mortgage fraud charges) was the owner and licensed mortgage broker for Promise Land Mortgage, an Indianapolis mortgage brokerage business, between late 2000 and early 2002.

Brice located and obtained at fair market value (in the names of office employees or investors) properties in low income neighborhoods of Indianapolis. He then used “ investors” to repurchase the properties a very short time later at 3-4 times their fair market value. JOHN WAGNER was Brice’ s main recruiter of investors. WAGNER recruited numerous individuals to participate in the scheme, many of whom were relatives. WAGNER also held investor meetings at the business office he set up to perpetuate this scheme, and gave presentations to investors to convince them to participate in the scheme. WAGNER set up a company called Family Connections LLC, which was used by him to participate in and perpetuate the scheme.

The investors were encouraged by WAGNER to buy 3-4 properties at a time, for “no money down.” They were given $10,000.00 per property back at closing by Brice. WAGNER was generally given $1,000.00-2,000.00 by Brice to locate and bring in the investors. WAGNER was also instrumental in obtaining the false down payment monies “ fronted” for the second sales; WAGNER instructed investors to provide these monies, explaining that they were helping other investors by loaning them money to purchase properties. The investors who provided the down payments received their fronted down

payment plus $500.00 back at closing; WAGNER sometimes received additional monies from Brice subsequent to closing for obtaining the down payment monies. In addition, WAGNER provided the up-front money for the first (cash) sales on some occasions. After the second closing, WAGNER received this money back, plus several $1000.00 per property for providing the money. All of the fraudulent mortgages were obtained thru ABN-AMRO, a Michigan lender.

Brice submitted false loan packages to the lender to obtain the mortgages. Along with the fraudulent appraisals, the loan packages included false loan applications, showing that the investors had assets and bank account balances far in excess of what they had.

ABN-AMRO approved and financed at least eighty-three (83) loans, based upon the false documents submitted by Brice. WAGNER was directly involved in fifty-three (53) of these loans. The total amount of those 53 loans was approximately $2,666,400.00. The total amount of loss suffered by ABN AMRO on these 53 loans was approximately $1,753,600.00.

According to Assistant United States Attorney Susan Heckard Dowd, who is prosecuting the cases for the government, WAGNER faces a maximum possible prison sentence of 15 years and a maximum possible fine of $500,000.00. An initial hearing will be scheduled for WAGNER before a United States Magistrate Judge in Indianapolis.

5:41PM

Two sentenced in another Georgia mortgage fraud

In the following press release from Atlanta, GA it was announced that CARL F. HAIRSTON, 32, and JANICE REENA HAIRSTON, a/k/a “Cheryl Owens,” 38, of Roswell, GA, were sentenced today (10/24/2006) by United States District Judge Charles A. Pannell, Jr. on charges of bank fraud and conspiracy to commit mortgage fraud, bankruptcy fraud, identity theft, money laundering and obstruction of justice.

“The Hairstons’ case was aggravated because they continued their fraud both after indictment and while awaiting sentence by filing multiple fraudulent bankruptcy petitions to retain fraud assets and by defrauding additional victims,” said United States Attorney David E. Nahmias. “This was an attack on the lawful functions of the United States Bankruptcy Court, and it is indicative of some of the bold criminal actions still taking place within the epidemic of mortgage fraud.”

Click here to read the indictment

The properties mentioned in the indictment are:
3762 Paradise Pointe, Duluth, Georgia
3670 Newport Bay Drive, Alpharetta, Georgia
2390 Terry Road, Huntington,Tennessee
CARL and JANICE HAIRSTON were both sentenced to 9 years in prison to be followed by 5 years of supervised release, and ordered not to be employed in any mortgage related business. They were also ordered to pay restitution of $416,652. The HAIRSTONS were convicted of these charges on February 3, 2006.

According to United States Attorney Nahmias and the information presented in court: Between July 2000 and January 2006, the HAIRSTONS obtained mortgage and other loans from First Horizon Money Center, a subsidiary of First Tennessee Bank, where CARL HAIRSTON was then branch manager, and from other banks. JANICE HAIRSTON laundered the loan proceeds through a series of shell companies. The HAIRSTONS also obtained a $615,000 fraudulent mortgage loan to purchase their personal residence and attempted to protect these fraudulently obtained assets by filing multiple fraudulent bankruptcy petitions.

This case is being investigated by Special Agents of the FBI. Assistant United States Attorney Gale McKenzie prosecuted the case.

5:25PM

Daily Updates - Thursday October 26, 2006

12:43PM

Two plead guilty in Florida mortgage fraud scheme

On October 18, 2006 R. Alexander Acosta, United States Attorney for the Southern District of Florida, Jonathan I. Solomon, Special Agent-In-Charge, Federal Bureau of Investigation and Brian J. Wimpling, Special Agent in Charge, Internal Revenue Service, Criminal Investigation, announced today that Rita Cardoso and her husband, Luis Delgado , of Miami, owners and operators of several health care related businesses located in Miami-Dade County, pled guilty today before United States District Court Judge Jose E. Martinez in Miami, Florida in relation to Medical and Mortgage frauds.

Part of the press release states that in or around March 2005, Cardoso and Delgado devised a scheme to get money out of properties that Cardoso owned either individually or jointly with Delgado. They agreed to use the identity of Delgado’s aunt, to apply for mortgage loans from lenders and make it appear that the aunt was purchasing properties from them when in reality she was not. Cardoso and Delgado falsified information regarding the aunt’s assets, employment and income were stated in loan applications and related documents. Cardoso and Delgado also used the aunt’s identity to purchase a home for themselves. They obtained approximately $1.8 million dollars from lenders in this scheme.

The properties mentioned in the information are:

10460 Southwest 4151 Terrace, Miami,
16940 Driftwood Drive , Sugarloaf Key,
13760 Southwest 30`h Street, Miami,
7135 Collins Avenue, Apartment 1821 , Miami Beach ,

Cardoso and Delgado face a maximum penalty of 10 years’ imprisonment on the health care fraud charges and fines of over $3 million dollars. For the structuring charges, Cardoso and Delgado face a maximum penalty of 5 years’ imprisonment and a $250,000 fine. They face a maximum penalty of 20 years’ imprisonment and a fines of over $3 million dollars for the wire and mail fraud charges. Mr. Acosta commended the investigative efforts of the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation Division. The case was prosecuted by Assistant United States Attorney Lois Foster-Steers.

Please click here for the mortgage fraud criminal information and then click here to read the full DOJ Press Release.

11:14AM

Wichita man given over 5 years in prison, 5 others sentenced

In the following press release from the United States Attorney in Wichita, KS it was announced that on October 16, 2006 a Wichita man has been sentenced to 66 months in federal prison for trying to defraud the U.S. Department of Housing and Urban Development. Byron D. Fitchpatrick, 32, was sentenced Wednesday during a hearing before U.S. District Judge J. Thomas Marten.

“It took a partnership among federal and local agencies including the U.S. Attorney’s office, the U.S. Department of Housing and Urban Development and the Sedgwick County Sheriff’s Office to bring this case to a successful conclusion,” said U.S. Attorney Eric Melgren.

Fitchpatrick pleaded guilty in June to one count of conspiracy to commit fraud against the U.S. government and one count of unlawfully possessing a firearm after a felony conviction. Click here to read the plea agreement and also click here to read the indictment

In his plea, he admitted that he was a real estate investor who would buy older homes, repair them and sell them for a profit. During the period from April 12, 2001, through January 2005, he bought six properties being sold by the U.S. Dept. Of Housing and Urban Development, some of them under his own name and some of them by having other people make the purchase on his behalf. He enlisted aid from the following people to defraud HUD: Manjur Alam, who was a real estate agent, Phil Phish, who was a real estate agent, Shatanya Fitchpatrick, Kathleen Fitchpatrick, Demond Reed and Deverell Jones.

The properties mentioned in the indictment are:

622 W. 11 Street, Wichita
2241 North Piatt, Wichita
2580 W Crawford Street , Wichita
1014 N Parkwood, Wichita
2237 S Glenn Street , Wichita
1402 N Battin Street, Wichita
2051 E 9th Street , Wichita
2053 E 9th Street , Wichita

When buying the houses, the conspirators falsely certified that each property was being purchased by a buyer who intended to occupy the house for at least a year. HUD would not have sold the houses without such a certification. Each property was transferred to Fitchpatrick or to his company, ABS Rentals, even though he never intended to live in the houses and never occupied them. HUD lost a total of $3,500 in fees paid to real estate agents and real estate companies for the fraudulent sales.

Also in this case:

Demond Reed was sentenced to 2 years probation.

Deverell Jones was sentenced to 2 years probation.

Manjur Alam was sentenced to 1 year probation.

Shatanya Fitchpatrick was sentenced to 3 years probation and restitution of $22,522.

Kathleen Fitchpatrick was sentenced to 1 year probation.

The U.S. Department of Housing and Urban Development and the Sedgwick County Sheriff’s office investigated the case. Assistant U.S. Attorney Matt Treaster and Assistant U.S. Attorney Annette Gurney prosecuted.

2:39PM

Two mortgage brokers indicted in Oregon

In the following press release from the US DOJ in Eugene Oregon  it was announced that on October 19, 2006 two Eugene based mortgage loan officers were indicted in a scheme involving the use of fraudulent information on loan applications submitted to obtain mortgage loans. Karin J. Immergut, United States Attorney for the District of Oregon, announced that MARK TODD HARLESS, age 39, and HIEN WILLIAMS, age 41, both residing in Eugene, Oregon, were charged in a three count federal indictment. According to the charges, from January through April 2005, HARLESS and WILLIAMS were employed as loan officers at Allegiance Mortgage Company in Eugene, Oregon. Known as “The Boys of Allegiance” in company advertisements, HARLESS and WILLIAMS are charged with engaging in a scheme to provide false employment information for some of their customers in order to qualify them for mortgage loans.

According to the indictment, HARLESS and WIILIAMS listed that three of their customers were each managers of a Eugene children’s clothing store, earning at least $3,000 per month, and had been employed there for at least two years. In reality, HARLESS’ girlfriend allegedly owned the store and none of the Allegiance customers worked there. HARLESS and WILLIAMS are further alleged to have caused loan applications, containing the false employment and earning information, to be submitted to lenders (New Century and GreenPoint) for loan approval.

Defendant HARLESS allegedly arranged for someone at the used clothing store to falsely verify to lenders that the Allegiance customers were really working at the store, and earning the income falsely listed in the loan applications. The indictment states that, on one occasion, defendant HARLESS charged an Allegiance customer $200 for use of the false employment and earning information. The loans were funded by lenders, and HARLESS and WILLIAMS earned commissions for the loans.

Please click here to read the indictment and then click here to see the press release

Defendant HARLESS and WILLIAMS were charged with wire fraud, which is a felony punishable by up to twenty years in prison and a $250,000 fine. They are scheduled for arraignment on November 13, 2006 in United States District Court in Eugene.

The Federal Bureau of Investigation and the State of Oregon, Division of Finance & Corporate Securities, who frequently combine forces to combat white collar fraud, jointly investigated this case.

An indictment is only an allegation of criminal activity. Defendants HARLESS and WILLIAMS are presumed innocent until proven guilt in court.

For additional information, contact Assistant United States Attorney Christopher Cardani at 541-465-6771.

1:29PM

Two Asst US Attorney's honored for work on mortgage fraud

In the following press release The United States Attorney’s Office today (10/20/2006) announced two Assistant United States Attorneys from Atlanta have received prestigious awards from the Department of Justice in Washington D.C. The Department of Justice held its 23rd annual Executive Office for United States Attorneys Director’s Award Ceremony today, during which 154 award recipients were recognized for their excellence in law enforcement.  Recipients included Assistant United States Attorneys, litigation and information technology support personnel, and others who have made outstanding contributions in federal, state and local law enforcement.

        “We are honored to have the Justice Department recognize the extraordinary work done by Assistant U.S. Attorneys Gale McKenzie and Barbara Nelan in the McFarland and other mortgage fraud cases,” said United States Attorney David E. Nahmias, while attending the ceremony in Washington. “With dedicated and skilled prosecutors like them, and our many partners in federal, state, and local law enforcement and regulatory agencies and community groups, we are achieving successes in attacking the mortgage fraud epidemic that has harmed so many citizens and neighborhoods in North Georgia.”
Assistant United States Attorneys Barbara Nelan and Gale McKenzie received the award for their outstanding dedication in the prosecution of mortgage fraud in metropolitan Atlanta. Specifically named was the case of defendant Chalandra  McFarland, which led to the convictions and jail sentences of 20 defendants, many of whom were professionals in the legal community and real estate and mortgage businesses, including a 30-year sentence for the closing attorney.  This prosecution represented a major step in combating mortgage fraud in metropolitan Atlanta, which held the dubious distinction of being the nation’s leader in mortgage fraud.

         “Today’s award recipients are honored for their extraordinary commitment to protecting our communities, promoting justice and preserving civil liberties that make our country so great,” said Attorney General Alberto R. Gonzales.  “It is through their dedicated efforts and sacrifice that we are able to preserve justice for our communities, our nation and for future generations.”

While terrorism remains the top priority of the Department of Justice, the Department has continued its mission to enforce all of our Nations’s laws, including prosecuting civil rights violations, gang violence and drug crimes, as well as representing our client agencies, conducting civil enforcement, and assisting victims of crime. The efforts of Assistant U.S. Attorneys Nelan and McKenzie in prosecuting mortgage fraud cases have produced results as evidenced by recent reporting that Georgia has dropped in the national rankings in the incidence of mortgage fraud. Since the prosecution, Ms. McKenzie has continued to work tirelessly with Georgia state and local prosecutors, the State Bar’s Real Estate Section, the real estate industry, the mortgage industry, and community activists to address the mortgage fraud problem.

The Executive Office for United States Attorneys provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ Offices around the country.

The Prieston Group would like to add its thanks for the work of Gale and Barbara.

9:26AM

Daily Updates - Thursday 19th October 2006

The following older entries were updated today. Please click on the link to read the full story.

Joseph LaForte and other family members plead guilty.