California Woman Pleads Guilty to Mortgage Fraud Conspiracy

admin —  July 23, 2009 — Leave a comment

Cheryl Ann Romero, 51, Santa Fe Springs, California, pleaded guilty in federal court for her role in a $12.6 million mortgage fraud conspiracy that involved 25 upscale residential properties in Lee’s Summit, Missouri and Raymore, Missouri.

As previously reported on Mortgage Fraud Blog, Romero is one of 17 defendants initially charged in an October 2008 federal indictment.

Romero is among 10 defendants who have pleaded guilty to the scheme to buy and sell new homes – all of which were built by Jerry R. Emerick, 39, Raymore, Missouri – 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, obtaining mortgage loans for more than the actual sale price by providing false information to mortgage lenders, then kept the extra proceeds. Buyers created shell companies for the purpose of receiving those kickbacks from Emerick, with kickbacks of up to $125,000 on each house.

Emerick owned and operated Ty Construction and Residential Contracting, LLC, which was engaged in the business of residential construction, primarily in Lee’s Summit and Raymore. He pleaded guilty on April 9, 2009, to conspiracy to commit mortgage fraud and wire fraud and to transfer funds obtained by fraud across state lines.

In total during the course of the conspiracy from June 2005 to May 2007, mortgage lenders approved loans for 25 homes totaling more than $12.6 million. From that total, buyers received approximately $2.3 million without the lenders’ knowledge.

Romero purchased two Lee’s Summit properties from Emerick. In obtaining mortgage loans to make the purchases, Romero made material misrepresentations in the loan applications upon which the lenders relied and received money back unbeknownst to the lenders.

Romero received a $519,900 loan to purchase the property at 4101 S.E. Canter Drive, for which she received a $90,000 kickback. Romero also received a $549,900 loan to purchase the property at 4513 Admiral Byrd Drive, for which she again received a $90,000 kickback. Both payments were made from the loan proceeds by the title company to Miracle Management, a company Romero set up for that purpose.

Under federal statutes, Romero 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.

Matt J. Whitworth, Acting United States Attorney for the Western District of Missouri announced the guilty plea. 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.

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