5 Charged with Making False Statements in Loan Applications

Allison Tussey —  August 9, 2012 — Leave a comment

Gloria A. Allen, 49, Madison, Alabama, Crystal S. Douglas, 30, Huntsville, Alabama, Julie Melissa McBrayer, 32, Birmingham, Michael Joseph Bennett, 38, Birmingham, and Danielle Lacey Chavers, 36, Birmingham, are the subjects of fraud charges in connection with false statements made in mortgage loan applications.

Allen is charged with making a materially false statement on a 2008 loan application that was submitted to the Federal Housing Administration. Douglas is charged with one count of making a materially false statement on a 2008 residential loan application to a financial institution insured by the Federal Deposit Insurance Corporation.

Both Allen and Douglas, who were aided and abetted by others in the same loan scheme, signed loan applications that contained falsely inflated income information, according to court documents.

In two other informations filed in connection with a 2007 mortgage loan of more than $500,000, McBrayer is charged with one count of mail fraud and Bennett is charged with one count of making false statements on loan documents.

At the time of the loan, McBrayer worked at Marathon Mortgage, Birmingham, as a loan originator and was responsible for compiling the loan documents for the sale of Bennett‘s property in Bessemer, Alabama, according to McBrayer‘s plea agreement with the government. In that agreement, McBrayer admits that she was directed to submit a false verification of employment form and a loan application that included false income information for the intended buyer of Bennett‘s property in order to ensure the buyer would be approved for first and second mortgage loans on the house.

Bennett was a home builder. He is charged with signing loan documents that he knew contained false information. Those documents included a Department of Housing and Urban Development form that is intended to disclose the party making the down payment on the property being purchased. According to Bennett‘s plea agreement in the case, he signed the HUD form stating that the borrower provided a down payment for his property when Bennett knew that someone else had provided the money.

The person who bought Bennett‘s property made only a few payments on the first and second mortgages, which totaled $546,659, and the house was placed in foreclosure soon after the loans were approved, according to McBrayer‘s plea agreement.

Chavers is charged with two counts of wire fraud associated with applications for mortgage loans on two houses in 2008. Chavers submitted loan documents containing false income and employment information when she applied for mortgages on houses in the Birmingham area, according to her plea agreement. The fraudulent mortgage applications prompted approval of the loans, causing funds to be wired from the lender’s accounts to the trust account of the attorney handling the closings on the real estate transactions, according to the plea agreement.

The maximum sentence for wire fraud and mail fraud is 20 years in prison and a $1 million fine. The maximum sentence for false statements on loan documents is five years in prison and a $100,000 fine.

U.S. Attorney Joyce White Vance announced the charges.

The FBI investigated all five cases. The HUD Office of Inspector General assisted in the investigation of the Allen and Douglas cases. Assistant U.S. Attorney Patrick Carney is prosecuting the cases.

“These prosecutions are part of our ongoing commitment to root out mortgage fraud, which contributed greatly to our nation’s financial meltdown,” Vance said. “We need to bring an end to this kind of criminal conduct.”

Allison Tussey

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