Mark Kellogg, 39, Shaker Heights, Ohio, and Beverly Cody, 43, Shaker Heights, Ohio, pleaded guilty to mortgage fraud-related offenses for their roles in a large mortgage fraud scheme in Slavic Village, Ohio. Sentencing for both defendants is scheduled for May 19, 2010, at 10:00 am.
Mark Kellogg, the deal maker and main defendant in the case, fraudulently acted as a mortgage broker and operated a criminal enterprise that involved others to fraudulently buy and sell 78 Slavic Village, Ohio, houses for profit. His enterprise ran numerous schemes to defraud lenders into making $5.8 million in bogus loans. Co-defendant, Beverly Cody assisted Kellogg as a buyer and seller and took money for falsely claiming to work on the houses while doing business as Cody’s Cleaning Service.
On April 13, 2010, Kellogg pleaded guilty to the 103 count indictment. These counts included engaging in a pattern of corrupt activity, conspiracy of engaging in a pattern of corrupt activity, money laundering, and forfeiture of all proceeds, theft by deception, securing writings by deception, telecommunications fraud, and tampering with government records. Kellogg faces a maximum sentence of 106 years in prison, a maximum fine of $6.6 million, plus restitution that may be ordered by the Court. Beverly Cody pleaded guilty to one count of money laundering and three counts of theft by deception. She faces a maximum of seven years in prison and a maximum fine of $25,000.
County Prosecutor Bill Mason and the Cuyahoga County Mortgage Fraud Task Force operating under authorization of Ohio Attorney General Richard Cordray and Ohio’s Organized Crime Investigations Commission announced the guilty plea.
“Mark Kellogg and his criminal operation ripped apart house after house in Slavic Village,” said Prosecutor Mason. “Not only did he plead guilty to running this criminal enterprise, but he also took responsibility for harming the community itself. This is the first time nationally that any mortgage fraud indictment has charged defendants with damaging homeowners living near houses listed in the indictment as a result of the criminal activity.”
Certain counts regarding theft by deception separately charged that the homeowners living near the houses listed in the indictment who sold their homes during this time period suffered losses as result of the criminal activity of these defendants. Both Kellogg and Cody pleaded guilty to these counts of theft by deception. Had this case gone to trial, expert witnesses from Cleveland State University and Case Western University would have testified that these homeowners suffered losses as a result of the fraudulent activity perpetrated by these defendants and others charged in the indictment.
A collaborative effort among law enforcement agencies was responsible for forming the task force that is combating the rampant mortgage fraud happening in Cuyahoga County.
The Task Force is comprised of federal, state, and local enforcement agencies: Cuyahoga County Prosecutor, FBI, U.S. Attorney’s Office, HUD Inspector General’s Office, U.S. Postal Inspector, Ohio Bureau of Criminal Identification and Investigation (BCII), Beachwood Police Department, Cleveland Heights Police Department, Pepper Pike Police Department, Solon Police Department, Cuyahoga County Recorder, Cuyahoga County Treasurer, Cuyahoga County Sheriff, and Department of Commerce-Division of Financial Institutions.