Mervyn A. Phelan, Sr., 74, Newport Beach, California, was sentenced by U.S. District Judge J. Frederick Motz to five years in prison, followed by three years of supervised release, for a wire fraud conspiracy, wire fraud and obstruction of justice from a $17.4 million investment fraud scheme.
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Brian McCloskey, 42, Baltimore, Maryland, was sentenced by U.S. District Judge J. Frederick Motz to 41 months in prison, followed by three years of supervised release, for conspiring to commit wire fraud arising from a $20 million investment fraud scheme wherein McCloskey and his conspirators made false representations to persuade lenders to fund loans.
Kevin Sniffen, 53, Phoenix, Maryland, an attorney licensed in Maryland, was sentenced by U.S. District Judge J. Frederick Motz sentenced to three years in prison, followed by three years of supervised release, for conspiring to commit wire fraud arising from an investment fraud scheme. Sean Krondak, 44, Irvine California, was sentenced to six months of home detention as part of three years’ probation for obstructing justice.
Patrick J. Belzner, a/k/a Patrick McCloskey, 45, Selbyville, Delaware, was sentenced by U.S. District Judge J. Frederick Motz to 15 years in prison followed, by three years of supervised release, on charges of wire fraud conspiracy, wire fraud and tax evasion for his role in a scheme to rip off investors by promising to secure large loans in exchange for substantial sums deposited in an escrow bank account.
Mervyn A. Phelan, Sr., 74, Newport Beach, California, and Gregory E. Grantham, 56, Oceanside, California, pleaded guilty to conspiracy, wire fraud and obstruction of justice for their roles in a real estate fraud scheme whereby private money lenders and investors were persuaded to deposit funds into escrow accounts, which were later pillaged by the conspirators.
Randy Lee Wilkins, 48, Gilroy, California, was sentenced to four years and nine months in prison for carrying out a mortgage fraud scheme in Fresno, California.The defendant and his co-conspirators defrauded lenders by using fraudulent loan applications misrepresenting their income, assets, liabilities and intent to occupy the residences.
Patrick J. Belzner, a/k/a Patrick McCloskey, 45, Glen Arm, Maryland, pleaded guilty to a wire fraud conspiracy, wire fraud and tax evasion. Belzer admitted advising wealthy individuals and investment advisers that in order for the McCloskey Group to obtain loans for real estate projects, the loan broker required large sums of money be deposited in an escrow bank account to show liquidity. However, the investors’ funds were removed soon after being deposited and the stolen funds to pay for their personal and business expenses, as well as to make partial repayments to earlier lenders.
Jayson Peter Costa, 41, Bakersfield, to 78 months’ imprisonment United States District Judge Lawrence J. O’Neill sentenced for his role in an extensive mortgage fraud scheme that ran from January 2004 to September 2007. Costa was ordered to self-surrender by May 5, 2014.
Carlyle “Carl” Lee Cole, 66, Bakersfield, California, was sentenced by United States District Judge Lawrence J. O’Neill to 17 years and seven months in prison and Caleb Lee Cole, 37, Bakersfield, was sentenced to six months in prison for charges stemming from their involvement in an extensive mortgage fraud scheme that ran from January 2004 to September 2007.
William Doug Mitchell, 50, Fort Worth, Texas, was convicted by a jury after one hour of deliberation for his role in a complex mortgage fraud scheme that targeted homes across North Texas.
According to the Indictment, beginning in 2004, forty individuals ““ among them, real estate agents, property finders, mortgage brokers and loan officers, title company attorneys, escrow officers, property appraisers, and straw buyers ““ conspired to defraud lending institutions by convincing them to approve mortgage loans for residential properties for which the property values had been fraudulently inflated.
The Indictment identified 114 residential properties located in cities throughout Texas, including Allen, Arlington, Cedar Hill, Coppell, Corinth, Cypress, Dallas, Flower Mound, Fort Worth, Frisco, Granbury, Heath, Highland Village, Houston, Keller, Lantana, Lewisville, Little Elm, Lubbock, Magnolia, McKinney, Plano, Roanoke, Southlake, Spring, The Woodlands, and Willis.
At trial, prosecutors presented the testimony of over twenty witnesses to establish that Mitchell was a licensed and certified residential property appraiser who inflated the values of residential homes, causing lending institutions to lend hundreds of thousands of dollars more than properties were actually worth. Mitchell falsified owner information, property information, and used property values that he had previously inflated as comparables on other properties to inflate their values. Mitchell was convicted on the three counts for which he was charged: specifically, one count of conspiring to commit mail and wire fraud and two counts of mail fraud.
Prior to trial, thirty-nine individuals either pled guilty or were convicted at trial for their part in the mortgage fraud scheme. Scheme architect John Barry, 42, as well as Allyson Barry, age unknown, each pled guilty for their roles in creating or supporting the scheme.
Title attorneys Daniel Ayers, 48, and Anthony Flores, 46, and escrow officer Debbie Fernie, 49, each pled guilty for their roles in closing the property transactions.
Real estate agents Joy Beckner, 56, Sheri Brower, 49, Julie Hanley, 55, Elaine Powers, 63, and Michelle Strickland, 44, each pled guilty for their roles in concealing true property values in the property transactions.
Loan officers Tim Dreslinski, 38, Jared Gowans, 32, Chris Howard, 43, Patty Peery, 57, Allison Ridgeway, 45, and Liz Smittle, 50, each pled guilty for their roles in falsifying loan applications for submission to lending institutions.
Appraisers Elizabeth Altizer, 45, Pamela Ford, 49, and Josh Melton, 34, each pled guilty for fraudulently inflating the value of houses in their appraisals.
Property flippers Frank Field, 52, Rita Hunter, age unknown, Shannon Jensen, 42, and Andrea Tannahill, 42, each pled guilty for serving as the conduit buyer/seller in property transactions that “flipped” immediately.
Straw buyers William Barry, 66, Christopher Feagan, 34, Debbie Friedman, 65, Patrick Johnson, 38, Travis Jones, 39, Delisa Kearney, 50, Francis Kearney, 49, Barbara Muzeni, 49, David Muzeni, 45, Kathleen Muzeni, 45, Brett Relander, 35, David Sacco, 57, Ellen Summers, 63, and Clarence White, 55, each pled guilty for submitting false loan applications to lending institutions.
Azza Bassiouny, 44, and Kamilla Kirch, 65, both mortgage brokers, were convicted at trial for their roles in falsifying loan applications.
Mitchell faces up to 20 years in federal prison on each of the charges. A sentencing date has not been set.
U.S. Attorney John M. Bales announced the conviction.
In assessing the verdict, U.S. Attorney Bales announced that, “The United States has brought to justice forty individuals who were responsible for causing millions of dollars of losses to lending institutions and also ruining whole neighborhoods across north Texas. Today is a triumph of justice over greed.”
This case was investigated by the FBI and the IRS and prosecuted by Assistant U.S. Attorneys Christopher A. Eason, Richard J, Johnson, and Shamoil T. Shipchandler.
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