Kenneth Perkins, 28, Groton, Connecticut, pleaded guilty before Chief United States District Judge Alvin W. Thompson in Hartford to one count of conspiracy to commit wire fraud stemming from his participation in a mortgage fraud scheme.
According to court documents and statements made in court, Perkins was a participant in a conspiracy to obtain residential real estate loans, including loans insured by the Federal Housing Administration, through the use of sham sales contracts, false loan applications and fraudulent property appraisals. As part of the scheme, individuals are alleged to have entered into sales contracts with straw purchasers to sell homes for a price higher than the actual price that the sellers would receive. Participants in the conspiracy submitted false documentation in connection with loan applications that were submitted, including fraudulent appraisals of the properties being purchased in order to justify the inflated sales price and the loan amount being sought to fund each purchase.
In pleading guilty, Perkins admitted that he agreed to serve as a buyer in approximately eight residential property sales that closed between about March 2007 and September 2007. Perkins admitted that the sales prices on the sales contracts and closing documents were fraudulently inflated, and that they were typically supported by a fraudulent appraisal, in order to secure a loan at an amount higher than the price actually agreed to by the seller. All but one of these properties are in Connecticut.
Perkins also admitted that false information was provided on his loan applications to the lenders in order to secure the loans needed to fund the property purchases. The false information included information about his income, his assets and liabilities, his intention to occupy the home as his primary residence, and his ownership interest in property in the prior three years. Perkins received as much as $20,000 each time he agreed to act as a buyer.
Perkins also assisted the conspiracy by helping to obtain residential real estate loans in the names of other straw buyers. This assistance included creating false documentation in support of loan applications, including false employment records, false wage records and false bank records. It also included utilizing a bank account into which some of the fraudulent proceeds were funneled, and working with an appraiser to generate fraudulent appraisals that would be sent to lenders in support of loan applications.
In total, Perkins‘ fraudulent conduct caused a loss of approximately $1.5 million to lending institutions.
Judge Thompson has scheduled sentencing for December 20, 2011, at which time Perkins faces a maximum term of imprisonment of five years and a fine of up to $250,000.
David B. Fein, United States Attorney for the District of Connecticut, announced the guilty plea.
U.S. Attorney Fein stated that the investigation is ongoing.
This case is being investigated by the Federal Bureau of Investigation and the U.S. Department of Housing and Urban Development – Office of Inspector General, and is being prosecuted by Assistant United States Attorneys Eric J. Glover and Susan Wines.
In July 2009, the U.S. Attorney’s Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. In addition to investigating past mortgage fraud schemes, the Task Force will focus on emerging crime trends that are associated with the growing tide of foreclosures, including foreclosure rescue schemes, and short sale schemes. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force, or by sending an email to email@example.com.
The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service – Criminal Investigation; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General, and State of Connecticut Department of Banking.
To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.