6 Indicted for Scam Involving Inflated Appraisals and Kickbacks

Allison Tussey —  June 18, 2013 — 5 Comments

A federal grand jury has indicted six defendants in a mortgage fraud conspiracy in which lenders provided over $3.5 million for fraudulently obtained loans.

Edgar Tibakweitira, a/k/a Edgar Julian, Charles Edgar Tibakweitira, and Edgar Gaudious Tibakweitira, 44, Severn, Maryland;

Flavia Makundi, 41, Severn, Maryland;

Carmen Johnson, 46, Gambrills, Maryland;

Mokorya Cosmas Wambura, 40, Mount Ranier, Maryland;

Cane Mwihava, 42, Bowie, Maryland; and

Annika Boas, 36, Mount Ranier, Maryland.

The indictment was returned on June 10, 2013, and the last defendant, Wambura, was arrested June 17, 2013.

According to the 21 count indictment, Tibakweitira was a real estate agent for Century 21 Advantage Realty and its successor, Elite Real Estate Group. Tibakweitira recruited his wife Makundi, and others, including Wambura, Mwihava and Boas, to act as straw purchasers of homes. Johnson owned CJ Lending and Able Estate & Company which provided credit repair services.

The indictment alleges that from March 2007 to November 2008, the defendants sought mortgages for properties at values in excess of the properties’ actual market values. Tibakweitira allegedly procured inflated appraisals and created false addendums to the sales contracts requiring large amounts of loan proceeds to be disbursed for renovations or repairs. The defendants allegedly used stolen or false identities, false documents – including W-2 forms, earnings statements, and bank statements – and false credit information to induce lenders to provide residential mortgage loans to the straw buyers.

Large amounts of the proceeds of the fraudulently obtained loans were allegedly disbursed from escrow accounts to Destiny Property Management, LLC and Destiny Property Management Company, which were shell companies owned by Tibakweitira, for repairs and renovations that were never made. These funds were in turn paid to the defendants. The defendants did not make or stopped making the mortgage payments and allowed the properties, including 10 properties located in Severna Park, Baltimore, Hyattsville and Silver Spring, Maryland, to go into foreclosure.

The indictment alleges that as a result of the conspiracy, lenders provided over $3.5 million for fraudulently obtained loans, which resulted in losses of over $1 million to the lenders, the Federal Housing Administration which insured some of the loans, and the Federal National Mortgage Corporation (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), who purchased some of the loans in the secondary mortgage market.

All of the defendants face a maximum sentence of 30 years in prison and a $1 million fine for the conspiracy and wire fraud; and a mandatory minimum of two years for aggravated identity theft consecutive to any other sentence. The defendants have had their initial appearances in federal court in Greenbelt. Tibakweitira, Makundi and Boas are currently detained and Johnson and Mwihava were released. A hearing is scheduled for Wambura regarding his detention.

The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Inspector General David A. Montoya, U.S. Department of Housing and Urban Development; Inspector General Steve A. Linick of the Federal Housing Finance Agency Office of Inspector General; Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service – Criminal Investigation, Washington, D.C. Field Office; Special Agent in Charge David Beach of the United States Secret Service – Washington Field Office; Brian Crane, Assistant Inspector General for Investigations, U.S. Department of the Treasury – Office of Inspector General; and Special Agent in Charge William Winter of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) .

United States Attorney Rod J. Rosenstein praised HUD-OIG, FHFA-OIG, Treasury OIG, U.S. Secret Service, IRS-Criminal Investigation and Baltimore HSI for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Kristi N. O’Malley and Special Assistant U.S. Attorney Kevin DiGregory, Investigative Counsel for the Federal Housing Finance Agency Inspector General, who are prosecuting the case.

Allison Tussey

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5 responses to 6 Indicted for Scam Involving Inflated Appraisals and Kickbacks

  1. Marshall McIntyre September 19, 2013 at 5:07 am

    When are they going to start licensing loan officers and have a seperate license for mortgage brokers and not allow real estate brokers to automatically be licensed as mortgage brokers? It seems like after FIREA they made appraisers get licensed and now have a huge amount of continuing education classes but most of the fraud, that I have seen on these pages, was caused by the originators. Very rare is the problem caused a (legit) appraiser. They typically are paid a minimal amount compared to the other participants and that is not based on the deal going through. Unfortunately they don’t have the ABA or NAR lobbying for them.

    • Marshall I agree appraisers are over-regulated. The loan people have powerful, highly paid lobbyists from NAR who think they can do a better job at appraising than professional appraisers. The private, educational appraisal organizations have unqualified lobbyists who are not qualified to represent appraisers’ interests. As a group, appraisers are expected to be the place where objectivity and ethics are injected into a process; on the other hand, where sales of homes and refinance loan transactions are there for licensed realtors and unlicensed loan officers are dipping, manipulating and pushing deals that allow them to use people’s home purchase or refi as an opportunity to grab for unearned treasure. I know some appraisers are producing unrealistic value opinions. Because appraisers have E & O insurance, lenders are going after that. Never mind the bulk of realtors that lie, cheat and nothing happens to them – they have protection. Sounds like mob rule to me….

  2. Who produced the inflated appraisals? Did the appraiser get prosecuted? If not, why not?

  3. This is the primary reason RE goes up. NOT supply & demand.

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