Co-Defendant Sent to Prison for Extensive Mortgage Fraud Scheme

Allison Tussey —  September 30, 2014 — Leave a comment

Julie Dianne Farmer, 46, Bakersfield, California, was sentenced by United States District Judge Lawrence J. O’Neill to three years in prison, to be followed by five years of supervised release, for her involvement in an extensive mortgage fraud scheme that ran from January 2004 to September 2007.

Judge O’Neill ordered her to pay $2,914,331 in restitution and to forfeit $15 million. Judge O’Neill also found that Farmer obstructed justice by testifying falsely at trial, and that she supervised other participants in the conspiracy.

On April 22, 2014, a federal jury found Farmer guilty of conspiracy to commit mail fraud, wire fraud and bank fraud, and two counts each of mail fraud and wire fraud.

According to the evidence at trial, Farmer was Crisp & Cole Real Estate’s (CCRE) chief operations officer and managed CCRE’s business operations and business accounts. Together with co-defendants David Crisp and Carl Cole, Farmer oversaw and managed a conspiracy to defraud residential lenders. They used straw purchasers to acquire properties at inflated prices with funds borrowed from lenders, often using 100 percent financing and based on false and fraudulent loan applications. The conspirators frequently resold the properties from one straw buyer to another, each time at an inflated, higher price in order to extract the purported increased “equity” from the property for their benefit. Ultimately, most of the properties were foreclosed upon after the defendants failed to make the mortgage payments when due.

Farmer was the only defendant who took her case to trial. Her co-defendants pleaded guilty for their roles in the scheme, and most have been sentenced. Carl Cole and David Crisp were each sentenced to 17 years and seven months in prison. Caleb Cole was sentenced to five months in prison, and Jennifer Crisp was sentenced to five years’ probation. Jayson Peter Costa was sentenced to six and a half years in prison. Michael Angelo Munoz received a sentence of two years in prison, and Jeriel Salinas received a 19-month sentence. Sneha Mohammadi is scheduled to be sentenced November 14, 2014. Robinson Nguyen has completed his 27-month sentence.

Five related cases were brought in 2009 and 2010 against five defendants who pleaded guilty to charges relating to this scheme. Jerald Allen Teixeira is scheduled to be sentenced on February 9, 2015. The sentences for the other defendants are as follows: Megan Balod – 36 months’ probation; Christopher Lance Stovall – one year in prison; Kevin Patrick Sluga – 20 months in prison; and Leslie Sluga – three years’ probation.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Kirk Sherriff, Henry Carbajal III, and Christopher Baker are prosecuting the case.

“Today’s sentencing is the result of a culture of greed and opportunism that saturated a Bakersfield real estate company,” said U.S. Attorney Wagner. “The owners of the company have been held accountable with lengthy prison sentences, but they could not have accomplished their crimes without the knowing and willing help of many within their organization. The fraud committed at Crisp & Cole and by other professionals prosecuted in our district made a bad financial climate even worse for our communities. The U.S. Attorney’s Office remains committed to uncovering and prosecuting fraud and abuse in all facets of the housing market.”

“As we discovered during the course of a multi-year investigation, Farmer, the chief operations officer of Crisp & Cole, conspired with David Crisp, Carl Cole, and others to intentionally defraud financial institutions of money and property for personal enrichment,” said Supervisory Special Agent Jose Moreno of the Sacramento FBI’s Bakersfield resident agency. “Such crimes are not victimless. The conspirators’ greed ultimately caused irreparable damage to the Bakersfield community that sentences or restitution cannot fully repair.”

Allison Tussey

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