4 Jailed for Mortgage Fraud Scheme Involving Straw Buyers

Allison Tussey —  November 17, 2014 — 1 Comment

Patrice Hairston, 52, Lawrenceville, Georgia, Bonnie Rose, 54, Jonesboro, Georgia, Sarah Hyldahl, 32, Marietta, Georgia, and Ronnika Allen, 30, Powder Springs, Georgia, have been sentenced for their roles in a scheme to defraud mortgage lenders of over $2 million in mortgage loans.

According to the charges and other information presented in court:  Hairston, a licensed real estate agent, and Rose were long time business partners, operating an office rental business on Covington Highway, DeKalb County, Ga.  In late 2007 or 2008, Hyldahl and Allen began working out of Hairston and Rose’s office space.

Beginning in 2008, Hairston, Rose, Hyldahl, and Allen worked together to locate properties, recruit straw borrowers, and obtain mortgage loans using false information about the borrowers’ employment, income, and assets.  Hairston created false W-2s and pay stubs (or earning statements) that were submitted to the lenders to obtain mortgage loans, along with fake bank statements that the co-conspirators obtained from other sources.  The false documents represented that the straw borrowers earned significant salaries working for a company owned by Hairston and Rose.  When lenders attempted to verify the straw borrower’s employment by contacting the company, Hairston, Rose, or their co-conspirators falsely verified the straw borrower’s employment, posing as a human resources manager or other high-level employee of Hairston and Rose’s company.

In addition to helping obtain fraudulent loans for straw borrowers, Rose and Allen purchased homes for themselves to live in using the same kind of false qualifying information that they used for straw borrowers.  Hairston helped a straw borrower obtain and close a loan for a home based on false qualifying information, and then moved into the straw borrower’s home.

For certain loans, the co-conspirators induced the mortgage lender and seller to pay a “marketing fee” to companies owned by the co-conspirators that ranged from $58,000 to $75,000 per property.  When the lender questioned the purpose of the “marketing fee” for one such property Hairston created a fake invoice for Hyldahl to submit to the lender that falsely portrayed the fee as having been paid for legitimate services.  When the loans closed, the co-conspirators split the proceeds among themselves.  Hairston, a licensed real estate agent, also received real estate commissions in the range of $7,000 to $9,000 on three of the properties.

The co-conspirators also used the funds obtained as “marketing fees” to pay the straw borrowers kickbacks as much as $15,000 after closing.  In addition, for certain loans, the co-conspirators advanced straw borrowers the down payment which they were supposed to make from their own funds.  Rose provided a cashier’s check which enabled the loan to close and then was paid back plus a small profit out of the “marketing fee” when the loan closed.

On January 22, 2009, federal and state law enforcement agents stopped a loan closing for a straw borrower that was based on false qualifying information and arrested Hyldahl, who was present for the closing.  The closing paperwork for this loan reflected that the co-conspirators were attempting to obtain over $75,000 as a false “marketing fee.”  Hairston was arrested when she arrived at the closing with the straw borrower’s down payment check, which she had obtained from Rose before coming to the closing.

Before the fraud ring was broken, the co-conspirators obtained over $2.7 million in total loans.  Lenders suffered an actual loss to date of $1.1 million on these loans, and may incur additional losses in the future as a result of these loans.  In addition to the properties that three co-defendants moved into, the co-conspirators obtained or attempted to obtain over $220,000 in cash from these closing (i.e., the “marketing fees”) and an additional approximately $23,000 in real estate commissions.

The defendants were sentenced as described below:

Hairston was convicted at trial earlier this year on multiple charges of conspiracy and mail and wire fraud, and has been sentenced to five years, four months in prison to be followed by three years of supervised release, and restitution will be determined.

Hyldahl pleaded guilty to conspiracy and cooperated with the Government, and has been sentenced to one year and one day in prison to be followed by three years of supervised release, and ordered to pay $798,299 in restitution.

Rose pleaded guilty to conspiracy and cooperated with the Government, and has been sentenced to three years of probation, the first eight months of which will be served in home confinement, and ordered to pay $339,531 in restitution.

Allen pleaded guilty to conspiracy and cooperated with the Government, and has been sentenced to two years of probation, the first 60 days of which are home confinement, and restitution of $192,458.

This case was investigated by the U.S. Postal Inspection Service and the Federal Bureau of Investigation.

Assistant United States Attorneys Doug Gilfillan and Christopher Huber prosecuted the case.

“Mortgage fraud has dragged down our economy, blighted our communities, and put in jeopardy the financial security of many Americans.  We will diligently pursue those who misuse the dream of home ownership to line their own pockets by fraud and deceit,” said United States Attorney Sally Quillian Yates.

“The U. S. Postal Inspection Service is committed to protecting the American Public from individuals who make misrepresentations to prey on innocent victims,” said Thomas L. Noyes II, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service.  “The collaborative effort between federal agencies in this case is an excellent example of the partnerships that focus on bringing those to justice who violate the law and defraud hardworking citizens.”

Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated: “Today’s sentencing of this group engaged in mortgage fraud represents the federal government’s commitment toward combatting such criminal activities. The FBI will continue to work with its various law enforcement partners in identifying such individuals engaged in this activity.”

Allison Tussey

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One response to 4 Jailed for Mortgage Fraud Scheme Involving Straw Buyers

  1. I am overjoyed that someone did this to the banksters, Why don’t you make a movie about it. They in turn have ripped off the pension funds of the american workers. It is hard work to find such cases. The post office, really, how hilarious. I got a good tip for them: OCWEN that is spelled O C W E N.

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