Charles M. Davis, 35, Rogersville, Missouri, Scott Allen Kassebaum, 42, Ozark, Missouri, Cheryl Joan Kassebaum, 43, Ozark, Missouri, three former mortgage brokers, and Steven Ray Spencer, 49, Carl Junction, Missouri and Shanda Lynn Moore, 45, Springfield, Missouri, have been sentenced in federal court for their roles in a $1.2 million mortgage fraud scheme.
As previously reported on Mortgage Fraud Blog, Davis, a former mortgage broker who was the owner of Master Marketing Consultants, pleaded guilty to his participation in two separate conspiracies to obtain mortgage loans for the purchase of homes based on false loan applications. Davis knew that the loan applications he prepared and submitted were false because the loan applications included overstatements of income and understatements or omissions of liabilities, falsely represented that the purchaser/borrower intended to reside in the home to be purchased, and, in some cases, stated a false place of employment for the purchaser/borrower.
A significant portion of the loan proceeds was returned to the purchasers of the homes (who also were the borrowers) without the lender’s knowledge. Davis facilitated these kickbacks to the purchasers by routing the proceeds through Master Marketing Consultants and, in some cases, through Metro Consulting Group, which was owned by the Kassebaums.
The mortgage fraud schemes involved a total of 20 houses with home mortgage loans ranging from approximately $200,000 to $500,000. The amount of loan proceeds returned to the borrowers ranged from less than $30,000 to more than $100,000. Some of the home purchasers subsequently defaulted on the loans, and the homes have been foreclosed or are in the process of being foreclosed.
In addition to the two conspiracy charges, Davis pleaded guilty to two counts of wire fraud and two counts of money laundering.
Scott and Cheryl Kassebaum, former mortgage brokers and co-owners of Metro Consulting Group, pleaded guilty to their roles in one of the mortgage fraud conspiracies with Davis that involved seven houses with home mortgage loans ranging from approximately $200,000 to more than $400,000. The Kassebaums prepared and submitted fraudulent loan applications to lenders and facilitated the return of a significant portion of the loan proceeds to themselves and other purchasers without the lender’s knowledge and outside the closing of the home purchase.
Cheryl Kassebaum also pleaded guilty to one count of wire fraud and one count of money laundering. Scott Kassebaum also pleaded guilty to one count of wire fraud and one count of money laundering.
Spencer pleaded guilty to his role in both of the mortgage fraud conspiracies. In each conspiracy, he was a purchaser and solicited other purchasers for the schemes. Spencer also pleaded guilty to one count of wire fraud and one count of money laundering.
Moore pleaded guilty to her role in one of the mortgage fraud conspiracies with Davis and Spencer. Moore admitted that she provided false employment verification for Spencer and another individual.
Davis was sentenced by U.S. District Judge Gary A. Fenner on Monday, May 17, 2010, to four years and three months in federal prison without parole. The court also ordered Davis to pay $1,271,590 in restitution. Scott Allen Kassebaum was sentenced to two years in federal prison without parole and ordered to pay $209,100 in restitution; his wife, Cheryl Joan Kassebaum was sentenced to 15 months in federal prison without parole and ordered to pay $497,200 in restitution. Spencer was sentenced to two years and six months in federal prison without parole and ordered to pay $436,556 in restitution. Moore was sentenced to three years of probation, including six months of home confinement and a $3,000 fine and restitution of $262,755.
This case was prosecuted by Assistant U.S. Attorney Douglas C. Bunch. It was investigated by the Federal Bureau of Investigation and IRS-Criminal Investigation.