Duo Plead Guilty to Property Flipping Scheme

admin —  June 1, 2010 — Leave a comment

Cynthia D. Jordan, 43, Lee’s Summit, Missouri, pleaded guilty to charges related to mortgage fraud schemes, including a $12.6 million conspiracy that involved 25 upscale residential properties in Lee’s Summit, Missouri, and Raymore, Missouri, and a property-flipping scheme in Kansas City, Missouri. Jordan, who was a mortgage loan broker for various mortgage brokers in the Kansas City, Missouri area, admitted that she participated in a property flipping scheme. Anahit Nshanian, 30, Long Beach, California, pleaded guilty on Thursday, May 20, 2010, to her role in the $12.6 million conspiracy.

Jordan and Nshanian are among 18 defendants, all of whom have now pleaded guilty.

As previously reported on Mortgage Fraud Blog and per the indictment, Jordan admitted that she was involved in a scheme to flip properties, buying residential properties that could immediately be sold in flip transactions for substantially more than the purchase price, without improvements to the properties. Jordan obtained mortgage loans to purchase the properties by submitting fraudulent documentation and making false representations. Jordan falsely represented that she would occupy the homes as her primary residence. As a result of the scheme, Jordan obtained money from the loan proceeds and directed loan proceeds be paid to others under the guise of false invoices and other false documents.

As part of the scheme, Jordan purchased a Kansas City, Missouri property for $355,000. At the time she entered the contract, she and co-conspirators planned to sell the property before a mortgage payment was due so that she did not have to make a loan payment. Jordan signed a contract to sell the property for $555,000 five days later, for which she received $17,500. Two co-conspirators, as a result of submitting fraudulent invoices, received a total of $172,974.

Jordan also purchased another Kansas City, Missouri, property for $537,000 that she agreed to sell within six days of her purchase for $775,000. Jordan received $17,173 and two co-conspirators, as a result of submitting fraudulent invoices, received a total of $193,000.

Under the terms of today’s plea agreement, the government and Jordan agree that the sentence imposed should not exceed nine years in federal prison without parole. A sentencing hearing will be scheduled after the completion of a pre-sentence investigation by the United States Probation Office.

Nshanian admitted that she was involved in a scheme to buy and sell new homes, all of which were built by Jerry R. Emerick, 40, Raymore, Missouri, in the Raintree and Belmont Farms subdivisions in Lee’s Summit, Missouri and the Eagle Glen subdivision in Raymore, Missouri from February 2005 through May 2007. 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 pleaded guilty to his role in the conspiracy and awaits sentencing.

In total during the course of the conspiracy, 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. Nshanian received approximately $148,614 in kickbacks.

Nshanian purchased two properties in Lee’s Summit, Missouri as part of the conspiracy. In obtaining mortgage loans, Nshanian made material misrepresentations upon which the lenders relied. Nshanian also admitted that she received money back unbeknownst to the lenders.

Nshanian received a $510,000 loan for one property; after closing, she received an $89,307 kickback, of which co-defendant Jerome Shade Howard, 41, Anaheim, California, received $20,693. Nshanian received a $657,500 loan for another property; after closing, she received a $80,000 kickback and Howard received $25,000.

Beth Phillips, United States Attorney for the Western District of Missouri made the announcement.

Under federal statutes, Nshanian 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 pre-sentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorneys Linda Parker Marshall and Kathleen D. Mahoney. It was investigated by the Federal Bureau of Investigation and IRS-Criminal Investigation.

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