Entries in Broker (519)

11:52PM

Former mortgage broker pleads guilty 

Loiusville Courier Journal - Oct 15 2004

A former New Albany mortgage broker pleaded guilty yesterday to fraud, money laundering, witness tampering, suborning perjury and possession of a firearm by a convicted felon.

James Scott Dewitt Cinnamon, 41 , faces a sentence of 57 to 64 months in prison under a plea agreement accepted yesterday by U.S. District Court Judge John Heyburn II in Louisville.

Cinnamon could have received 70 years in prison and a fine of up to $2.25million if convicted of the seven counts to which he pled guilty. He will not be fined under the plea agreement. The plea bargain combines two separate cases with a total of 36 criminal counts that had been filed separately by federal prosecutors in both New Albany and Louisville.

Cinnamon , who has been held in the Grayson County (Ky.) Jail since 2002, gave his prior address as the 2700 block of Lamont Road in Louisville. He was charged in the Indiana case with 16 counts each of money laundering and bank fraud in connection with mortgages through Mortgage One of Indiana , a company that he ran in New Albany from 1995 to 1999.

He was charged with closing 16 mortgage refinancing loans totaling more than $1.4million without paying off the original loans during the refinancing boom of 1999. Checks written by First Tennessee Bank to pay off the loans were instead deposited in accounts controlled by Cinnamon, according to court documents.

Clients then received payment-due notices from both First Tennessee and their prior mortgage holder on loans ranging from $32,250 to $202,700. First Tennessee eventually paid off the prior loans. Prosecutors will ask Heyburn to order Cinnamon to repay the bank, according to the plea agreement.

The fraud and money-laundering charges to which he pled guilty relate to a single loan for $56,900, but Cinnamon admitted in the plea agreement that he laundered the full $1.4million total of all 16 loans in the original indictment. The four charges from Kentucky include tampering with a witness, two counts of suborning perjury and one count of unlawful possession of a firearm by a convicted felon.

The witness tampering and perjury counts say Cinnamon got others to say falsely that they owned guns found in his home in May 2001. Cinnamon is serving a 41-month prison term for possession of a handgun by a convicted felon in connection with that case.

11:38PM

Actions Taken Against Brokers and Lenders by NYDoB

Excerpts from the New York Banking Department Weekly Bulletin — October 15, 2004

The following brokers were removed from the roll for failing to comply with Surety Bond requirements:

Date

Broker

Address

10 07 04

Bullaro Securities Corp.

Astoria , NY 11103

10 07 04

H-U-S Of Staten Island, Inc. D/B/A HelpU Funding

Staten Island , NY 10305

10 07 04

James Williams D/B/A Jmg System Enterprises

Jamaica , NY 11435

10 07 04

Russell Financial Corporation

New York , NY 10028

10 07 04

Strategic Financial Network Inc.

New York , NY 10036

11:41PM

Actions Taken Against Brokers and Lenders by NYDoB

Excerpts from the New York Banking Department Weekly Bulletin — October 8, 2004

The following brokers were removed from the roll for failing to comply with Surety Bond requirements:

Date

Broker

Address

10 07 04

Lawrence S. Avroch D/B/A Best Seller Realty

Bayside, NY 11364

10 07 04

Vincent A. Alexander

Rochester , NY 14623

3:57PM

Defendant guilty in $10 million fake closings scam

North West Herald - October 7, 2004

ROCKFORD — Another person pleaded guilty Wednesday to federal wire-fraud charges stemming from a real-estate closing ring halted by Crystal Lake police.
Julita Uramowska, 31, of 3903 Grand Ave., Western Springs, pleaded guilty to wire fraud in connection with the $10 million scheme that involved 11 people and 19 fake real-estate closings. Uramowska could be sentenced to 30 years in prison. Her sentencing is set for Jan. 18.

Group members posed as real-estate buyers and arranged for financing to buy a property, according to the federal indictment. The group then gave the title company a fake mortgage release that indicated that other companies holding mortgages on the property had released them, according to the indictment.

The title companies then gave the group the money from the loan, which they laundered by depositing it into bank accounts of third parties, according to the indictment. Prosecutors believe three of the incidents occurred at two Crystal Lake title companies in September 2003.

The group allegedly stole $623,000 during the three transactions. Crystal Lake police caught three members of the group after a bank teller became suspicious when one of the men attempted to cash one of the six-figure checks.

Uramowska admitted in court that she worked for a mortgage brokerage and arranged lending for the fake buyers, prosecutors said. Another member of the scam ring, Zbigniew Recko, 35, 3901 N. Tripp Ave., Apt. 310, Chicago, pleaded guilty last week to one count of wire fraud.

10:51PM

Two PA men convicted in Mortgage Fraud

Pittsburgh Live - Thursday, October 7, 2004

PITTSBURGH — An Indiana Township man must pay more than $700,000 in restitution following his conviction on federal tax evasion and other charges. Terry A. Boring , 55, of Alpine Village Drive, was accused of using his home remodeling business to secure fraudulent mortgage loans for unqualified homeowners. Boring pleaded guilty in April to charges of income tax evasion, conspiracy, mail fraud and making false representations to a government agency. Senior U.S. District Judge Maurice B. Cohill in Pittsburgh sentenced Boring on Sept. 29 to two years and three months in prison and five years of probation in addition to the restitution.

Boring and his business partner, William T. McKee , 51, of Forest Hills, allegedly operated under several business names, including Zintron and Patrome Construction , between June 1993 and November 2003. During that time they are accused of defrauding banks and private lenders by falsifying employment, income, insurance and other information to make homeowners appear qualified for loans. Some homeowners subsequently were unable to make loan payments and lost their homes in foreclosures.

The partners also defrauded the federal Department of Housing and Urban Development by applying for property improvement loans for the homeowners, which required HUD to repay the lending agencies if the homeowners defaulted.

“Boring’s 10-year predatory lending scheme devastated many homeowners who had struggled for years to obtain the American dream of home ownership,” said U.S. Attorney Mary Beth Buchanan in a written statement following the sentencing.

McKee also admitted to participating in the conspiracy and was to be sentenced this week. He faces up to 70 years in prison and as much as a $2.5 million fine.

12:35PM

Broker license revoked

Nevada Mortgage Lending Division Notice

Certified Holding Limited Partnership dba Granite Mortgage & Loan - On 8/23/2004 the Division issued an order for submitting false and forged financial statements; failure to comply with advertising requirements.  On 10/1/2004 Granite consented to a permanent revocation.
10:27AM

3 indicted in scheme to raise bail money for woman accused of murder

US DOJ Press Release - September 30, 2004

Philadelphia - United States Attorney Patrick L. Meehan today announced the filing of an indictment* charging Dorian Baker, James Harley, and Caprice Peay with one count of wire fraud, in violation of 18 U.S.C. § 1343, and one count of identity theft, in violation of 18 U.S.C. §§ 1028(a)(7), (B)(1)(D), and (c)(3)(A). This case arose from the defendants’ scheme in which they engaged in 2003 to defraud several mortgage companies, financial institutions and merchants by obtaining loans and merchandise through the use of fraudulent information and identity fraud.

According to the indictment, the defendants engaged in this fraud scheme to raise money to pay the bail of an individual who was in custody in New Jersey on murder charges. The defendants pursued several loans through mortgage companies by using fraudulent information to support the loan applications and by using false identities to secure the loans. The defendants also used false identification information to obtain credit at an automobile dealership and other merchants to fund the purchase of a new 2004 Nissan Maxima, a television and jewelry. In total, the defendants attempted to defraud victims out of over $400,000, and actually obtained about $115,000 in cash and merchandise through this scheme.

Read the whole indictment by clicking here

3:45PM

New Questions Raised About Former Dallas Cowboys Player's Mortgage Business

Truck driver David Barnes sweats to support his wife and son in a modest brick home on the outskirts of Lancaster. The little house and the money to buy it came the hard, honest way, mile by mile, in the cab of an 18-wheeler. Yet for the past eight months, Barnes has been listed as the unlikely owner of a half-million dollar luxury “investment” home in McKinney three times the size of the one he actually lives in.

He is on the hook for a half million dollars he can’t even begin to pay for the property - a gleaming brick and stone new construction house he had never even seen until CBS-11 News took him there recently. For months, debt collectors have been banging down Barnes’ door for payments on the house, utilities, and even homeowners association dues.

“I don’t even have $100 to my name,” he said. Barne’s once-perfect credit is in ruins. His wife and family are furious with him. How did this state of affairs come to be?

According to Barnes, who has a high school education and grew up chopping cotton in rural Mississippi, former Dallas Cowboys player Eugene Lockhart used celebrity to bedazzle him with promises of quick wealth from a special investment program, free game tickets and dalliances with current team stars. And $10,000 cash upfront on future profits, a payment that law enforcement experts say may be against the law.

“He’s like, ‘Are you a Cowboys fan? And I say, yup. And he says okay we can get you some tickets and everything. You let me know what game you want to attend and you and your buddies have at it,’” Barnes said. “He played for the Cowboys, and I thought he was financially able to do what he said he was going to do,” Barnes said. “He presented himself well.”

In the end, CBS-11 has learned, Lockhart’s company ended up pocketing more than $100,000 on the Barnes deal and left him, the mortgage company - and ultimately the insurance industry - holding the bag. The FBI, as well as the California-based mortgage company People’s Choice, are investigating as many as 18 similar real estate deals that Lockhart’s companies and associates set up.

In an interview, Lockhart said he has never once met Barnes and that he had no knowledge about any of his company’s daily dealings with the houses. He blamed former associates and employees for any problems and insisted he began working hard to fix all real estate deals as soon as he learned they have gone awry.

Lockhart and his attorney, Jay Ethington, also presented CBS-11 with signed statements from seven customers who state he was never personally involved in the deals.

“I understand that there were problems done in those particular files,” Lockhart told CBS-11. “I’m doing everything to be sure and get it all corrected and to go forward in helping all of our investors and be sure it doesn’t happen again.”

Barnes and several other financially marginal “investors” said Eugene Lockhart’s Cowboys Mortgage company, or subsequent variations of it, had promised to let them in on a sure-thing real estate investment program. The company, now being reconfigured as Ace Mortgage, would take care of all the details - all Barnes had to do was sign a few papers and lend his good name and credit.

Barnes said Lockhart’s representatives promised that the company would arrange financing for a first and second mortgage on a new construction home that had been located for far below market value. Tenants would be placed in the home to pay the mortgage and utilities. He said Lockhart’s company promised to buy him out after a year and split the huge profits.

A major obstacle stood in the way: Barnes didn’t make nearly enough money to qualify for such loans. CBS-11 News has learned that Barnes’ loan application was falsified to reflect that he earned $180,000 a year as owner of his own trucking company. CBS-11 has found other Cowboys Team Mortgage loan applications in which incomes were vastly inflated.

CBS-11 also has learned that an appraisal used by Lockhart’s company for the Barnes deal and several others were vastly inflated - in Barnes’ case by $115,000 more than other houses in the immediate vicinity. The difference was pocketed by Lockhart’s company at closing, records show.

No legitimate tenant was ever placed in Barnes’ new luxury investment property, and soon collection notices and foreclosure warnings were cramming his mailbox.

“Everybody’s pocket got fat except mine,” Barnes said. “Some of (Barnes’ friends back in Mississippi) would say, ‘man you just got tricked…Gangster style.”

Lockhart defended the extraordinarily high fees his company collected from some of the deals that CBS-11 has investigated. “There’s a lot of work that’s involved in just buying and selling, and we get the money,” he said. “There’s closing costs involved. There’s rent that has to be paid. There’s advertising.

“There’s marketing and maintencance of the properties. Of course we make our money, but the investors all share in the profits as well.”
Real estate fraud experts say the deals described to them by CBS-11 resemble classic mortgage fraud scheme known as property flipping. In property flipping, a house is bought and then fraudulently appraised at a value much higher than it’s worth and then quickly sold to an unsuspecing buyer.

In the case of David Barne’ house, the appraiser used the sales prices of houses in a posh neighborhood located a mile and a half away from Barnes’ neighborhood to set the value of his house at more than a half million dollars.

Bryan Moorman , the appraiser used by Lockhart on a number of questionable house deals, said he properly followed standard practices in appraising Barnes’ house. But when questioned further, he hung up on CBS-11 Investigative Producer Todd Bensman. A check of his appraisal showed that Moorman compared Barnes’ house with one that backed up onto a lake and another set next to a meandering, manicured greenbelt on a remote cul-de-sac.

A larger house just across the street from the one Barnes owns was on sale for $387,000, much less than the half million his was appraised for. Lockhart brought three of his investors to the interview with CBS-11 News. all three said their loan applications were accurate and that Lockhart did not directly participate in their preparation.

One of them Steven McGee, obtained a $335,000 loan through Cowboys Mortgage for a house in Frisco. McGee said he works as an hourly employee in a Walmart vision center. CBS-11 has learned that McGee’s loan application states he was a self-employed optical engineer making $6,500 a month. And, a signed statement promised the banks, as a condition of the loan, that McGee would live in the house. Asked if he had ever lived in the house, McGee said he had not.

“I went by and I was…and I thought about it, but actually living? No,” McGee said.

Law enforcement authorities ay the allegations against Lockhart are a drop in the bucket when it comes to mortgage fraud. The FBI and other investigative agencies say mortgage fraud is occurring at historic highs across America