6 Charged With Submitting False Loan Applications

admin —  June 4, 2010 — 6 Comments

Brian Andrew La Porte, Daniel John Schuetz, Michael Wayne Wickware, Roxanne Yvette Hempstead, Darryl Anthony Wallace, aka Darryl Anthony White, and Terrence Smith, aka Terry Lee Smith, California residents, have been charged with submitting false and fraudulent mortgage loan applications and related documents to banks and other lending institutions, thereby inducing the institutions to make approximately 36 loans totaling approximately $20,800,000.00.

The indictment alleges that the defendants devised a scheme to defraud mortgage lenders and to obtain money and property by false and fraudulent means and diverted the proceeds for their personal use and benefit.

According to the indictment, from May 2008, the defendants agreed to submit false loan applications to mortgage lenders to obtain financing to purchase residential properties. The defendants recruited “straw buyers” who had sound credit histories but who otherwise would not have qualified to purchase the residential properties selected by the defendants. The indictment further alleges that, as part of the conspiracy, defendants Brian Andrew La Porte and Daniel John Schuetz prepared fraudulent loan applications on behalf of the straw purchasers, falsely stating the employment and monthly salaries of the straw purchasers.

The indictment further alleges that the defendants submitted fraudulent loan applications on behalf of the straw purchasers to mortgage lenders, including OwnIt Mortgage Solutions, Inc., WMC Mortgage Corp., Argent Mortgage Company, Countrywide Home Loans, First Franklin, and Finance America LLC, and other mortgage lenders. The defendants then caused escrow agents to disburse the funds to the defendants and others so that the defendants could divert to themselves and others the proceeds of the fraud.

The case is the product of an investigation by agents of the Federal Bureau of Investigation and is being prosecuted in San Diego federal court by Assistant U.S. Attorney Jonathan I. Shapiro.

An indictment itself is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.

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6 responses to 6 Charged With Submitting False Loan Applications

  1. Brian Andrew Laporte’s sentencing article I can’t find it on your site. I am his Uncle

  2. This is odd, I applied for a mortgage loan mod and when I got back the offer, the payment was rather high, and I looked the offer over carefully and found the MORTGAGE company had inflated my income by $600 a month! I refused the offer and set it back to them to re-do, that was over a month ago, and so far, no new offer! This mortgage company has many, many, many complaints for stuff like this, so, maybe I need to report them to the DOJ or get an attny to sue?

  3. It’s amazing that this type of practice could still be going on in our industry…

  4. Borrowers don’t lie. If anything, they’re too honest. Mortgage brokers convince them it’s o.k., or they alter the numbers after borrower leaves the office. Been there, seen it.

    See 60 Minutes-Katie Kouric

  5. Um, isn’t this what everyone was doing? I still have mortgage brokers telling me that it was never illegal to lie on stated income loans and interestingly, 90% LTV stated income loans are now back in the marketplace. ALL mortgage brokers believe that those loans are specifically designed for the borrower to lie and they are of course correct. Why would someone pay a higher interest rate and additional fees to avoid the hassle of making a photocopy of their tax return?

    Oh, I know! Lots of people say, “Well, many of these stated income borrowers are self-employed and they engage in tax fraud, so their tax returns don’t reflect their true income!” That seems like a silly argument to me. What about W-2 employed borrowers who claim to have a substantial second income from dealing drugs? Should they be given stated income loans too?

    The only people who get prosecuted are the ones who engaged in frauds the banks didn’t specifically order. The banks want individual borrowers to lie on stated income loans. That’s why the offer those loans. The banks don’t want people to lie on multiple stated income loans with the intent of not paying. They want individual borrowers who don’t intend to default to lie on stated income loans.

    But lying on a mortgage application even if your broker says “everybody is doing it” is a felony. It’s a federal crime because the banks involved usually have FDIC insurance. It’s felony fraud and nobody prosecutes it and mortgage brokers and real estate agents will tell you that it’s not really fraud because everybody knows it’s going on.

    The disgusting and reprehensible thing is that the taxpayer pays the banks 100% of the money back in these sick bailouts and when Ben Bernanke buys $600 billion worth of mortgage bonds for $1.25 trillion to hand bags full of money to bankers. Either the defraud idiot borrowers and make trillions, or the stupid borrowers can’t pay and they get a mulligan from freshly printed fiat currency. All while homeless people stealing a loaf of bread look at hard time in jail. A fraud costing the nation $300,000 is not prosecuted, while one costing it $3.00 is vigorously prosecuted with police action and jail time.

    Welcome to the new United States where loan fraud is part of what’s necessary to keep the market humming.

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