Ronald E. Brown, Jr., 39, Gladstone, Missouri, pleaded guilty before U.S. Chief District Judge Fernando J. Gaitan to to his role in a $12.6 million mortgage fraud scheme that involved 25 residential properties in Lee’s Summit and Raymore, Missouri. Brown was charge in an Oct. 29, 2008, federal indictment.
By pleading guilty, Brown admitted that he participated in a conspiracy to defraud mortgage lenders from June 2005 to May 2007. Brown was among more than a dozen conspirators who were involved in buying and selling new homes in the Raintree and Belmont Farms subdivisions in Lee’s Summit and the Eagle Glen subdivision in Raymore. Buyers purchased the homes at inflated prices, obtainin! g mortgage loans by providing false information to mortgage lenders, then keeping the extra proceeds. Buyers created shell companies for the purpose of receiving those kickbacks from the builder, with kickbacks ranging from $60,000 to $125,000 on each house.
Brown, a self-employed insurance agent doing business as The Brown Insurance Agency in Kansas City, Kansas, obtained insurance for the properties that were purchased. After purchasing two false Social Security numbers for $10,000, Brown used the false Social Security number to purchase three properties in Lee’s Summit, Missouri. In each case, Brown made material misrepresentations upon which the lenders relied in making the mortgage loans, which totaled $1,339,700. From the purchase of these properties, unbeknownst to the lenders, Brown received a total of $279,426. In total during the course of the conspiracy, mortgage lenders approved 25 loans totaling $12,616,990. From that total, buyers received approximately $2,343,337 without the lenders’ knowledge.
Under federal statutes, Brown is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Linda Parker Marshall. It was investigated by the Federal Bureau of Investigation and IRS”Criminal Investigation.