Former Mortgage Broker Pleads Guilty to $1.2 Million Mortgage Fraud Scheme

admin —  August 14, 2009 — Leave a comment

Charles M. Davis, 34, Rogersville, Missouri, has pleaded guilty to the charges contained in a Nov. 20, 2008, federal indictment, alleging his role in a $1.2 million mortgage fraud scheme.

As previously reported on Mortgage Fraud Blog, Davis, a former mortgage broker who was the owner of Master Marketing Consultants, admitted that he participated in two separate conspiracies to obtain mortgage loans for the purchase of homes based on false loan applications. Davis knew that the loan applications he prepared and submitted, or caused to be prepared and submitted, were false in that the loan applications included overstatements of income and understatements or omissions of liabilities, falsely represented that the purchaser/borrower intended to reside in the home to be purchased, and, in some cases, stated a false place of employment for the purchaser/borrower.

A significant portion of the loan proceeds was returned to the purchasers of the homes (who also were the borrowers) without the lender’s knowledge and outside the closing of the home purchase. Davis facilitated the return of loan proceeds to the purchasers/borrowers by routing the returned proceeds through Master Marketing Consultants and then, in some cases, through Metro Consulting Group.

Co-defendants Scott Allen Kassebaum, 42, and his wife Cheryl Joan Kassebaum, 43, both of Ozark, Missouri, have also pleaded guilty to their roles in one of the mortgage fraud conspiracies. The Kassebaums are former mortgage brokers and co-owners of Metro Consulting Group.

The readily provable economic loss attributable to Davis’ criminal conduct – the aggregate loan proceeds obtained through false loan applications and returned to purchasers/borrowers by or through Davis without the lender’s knowledge and outside the closing of the home purchase – is $1,271,590.

The mortgage fraud schemes involved a total of 20 houses with home mortgage loans ranging from approximately $200,000 to $500,000. The amount of loan proceeds returned to the borrowers ranged from less than $30,000 to more than $100,000. Some of the home purchasers subsequently defaulted on the loans, and the homes have been foreclosed or are in the process of being foreclosed.

In addition to the two conspiracy charges, Davis pleaded guilty to two counts of wire fraud, related to the transfer of loan proceeds from the scheme, and two counts of money laundering, related to monetary transactions involving criminally-derived property.

Under federal statutes, Davis is subject to a sentence of up to 90 years in federal prison without parole, plus a fine up to $3 million 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 Douglas C. Bunch. It was investigated by the Federal Bureau of Investigation and IRS-Criminal Investigation.

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