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Chalana McFarland Sentenced to 30 Years in Prison

Georgia Hands Down Longest Mortgage Fraud Sentence

Chalana McFarland, a/k/a ”Chalana Cosby” a disbarred closing attorney from Stone Mountain, Georgia (who later moved her operations to Miami, Florida) was sentenced to 30 years in federal prison and ordered to pay nearly $12 million in restitution.  This sentence is believed to be the most severe ever handed down in the United States in a mortgage fraud case. 

McFarland was convicted on February 15, 2005, on a 170-count indictment that included charges of conspiracy, bank fraud, wire fraud, mail fraud, identity theft, fraudulent use of social security numbers, money laundering, obstruction of justice and perjury arising out of her involvement with a mortgage fraud ring that flipped more than one hundred homes in Atlanta, Georgia.  Seventeen of her nineteen co-defendants testified against her at the trial. 

During the sentencing hearing, Judge Thrash noted that mortgage fraud is a very serious problem and that McFarland’s conduct had victimized banks, mortgage and title insurers, college students whose financial identities were stolen, and the neighborhoods in which the flipping ring operated.  He cited McFarland’s lack of remorse, her prominent role in controlling the scheme, and the fact that she abused the public trust and her position as an attorney as factors contributing to the severity of the sentence.

According to the pre-sentence report, McFarland could have been sentenced to life in prison.  Assistant US Attorney Barbara Nelan, moved for a downward departure and asked for a minimum of 30 years. 

McFarland was originally indicted on May 13, 2004. Also indicted at various times and subsequently pleading guilty to charges related to the multi-million dollar mortgage fraud scheme initiated and orchestrated by McFarland were:

paralegals Brenda G. Brown, 45, of Lithonia, Georgia and Lisa R. Bellamy, 33, of Decatur, Georgia;

mortgage broker Claude Blevins, 59, of Roswell, Georgia;

loan originators Renee Meeks, 51, of Stone Mountain, Georgia; Judith H. ‘Judy’ Hooper, a/k/a ’Jerry Dale Hunter,’ 55, formerly of Atlanta, Georgia, Latonya Cromartie, 37, of Marietta, Georgia, Melinda Renee Tyner, 33, of Lawrenceville, Georgia, George Toomer, 65, of Stone Mountain, Georgia, and James Thomas Patterson, 31, of Fayetteville, Georgia, appraiser Brandon G. Wilhite, 29, formerly of Jonesboro, Georgia;

real estate agents and property locators Thomas Christopher Davis, Sr., 35, of Atlanta, Georgia, Jewel Williams, 38, of Atlanta, Georgia, and Sidney Williams, 39, of Atlanta, Georgia;

straw borrowers Melvin Howard Quillen, 35, of Philadelphia, Pennsylvania, formerly of Jonesboro, Georgia, Carla White, 41, of Decatur, Georgia, and Huey White, 54, of Lilburn, Georgia;

bank employee Deysha Simspon, 35, of Atlanta, Georgia;

money launderer and property manager Lupita, McCarthy, 52, of Stone Mountain, Georgia; and

identity thief Omar Rashad Turral, 25, of Lauderhill, Florida.

According to the evidence presented in court, McFarland was the leader and organizer of an extensive mortgage fraud scheme from mid-1999 through late 2002 involving over a hundred properties in the Atlanta, Georgia area. At the direction of McFarland, the defendants defrauded financial institutions and other mortgage lenders by fraudulently inflating property values and submitting false borrower qualifying information to obtain mortgage loans, using mailings and wire transfers of false qualifying information and scheme proceeds. The defendants conspired to use either stolen identities and false Social Security Numbers as borrowers or paid straw borrowers to apply for mortgage loans totaling approximately $20 million. False employment, income, assets and liabilities were listed on loan applications to qualify borrowers for these loans. Fraudulently inflated loan proceeds were removed at closing, laundered through The McFarland Law Firm escrow accounts and disbursed to various shell or ‘air’ companies for the benefit of McFarland and her co-conspirators. Most of the properties were ultimately foreclosed by the lenders and sold for significantly less than their outstanding loans.

The residential properties so purchased by McFarland and her co-conspirators were primarily located in the Mountain Oaks, North Shore, Southland and Waters Edge subdivisions in Lithonia and Stone Mountain, and in Sugar Hill, Snellville, Decatur, Clarkston, Fayetteville, Douglasville, Fairburn, and Griffin, Georgia. These properties were then resold, often on the same day, at artificially inflated prices, using the proceeds of the resale to pay for the initial purchase, a practice commonly referred to as ‘flipping.’

During this conspiracy, McFarland owned and operated The McFarland Law Firm, located first at 4820 Redan Road, Stone Mountain, Georgia, and later at 900 North Hairston Road, Stone Mountain, Georgia. While acting as agent for title insurance companies and the closing attorney for various lenders, McFarland caused false HUD-1 Settlement Statements to be signed certifying that she received borrower down payments and disbursed loan proceeds as reflected on the statements, when in fact her receipts and disbursements were not accurately reflected on the settlement statements. McFarland paid her identity thief co-conspirator $10,000 per stolen identity, the primary appraiser who inflated property values over $400,000, and other co-conspirators from her escrow account without reflecting such payments on the settlement statements, while failing to collect the required borrower down payments listed on the statements.

Paralegal Brenda Brown was sentenced to 7 years, 3 months in prison on June 29, 2005. Paralegal Lisa Bellamy, was sentenced to 3 years, 5 months in prison on June 29, 2005. Brandon Wilhite, a former appraiser who inflated many of the home prices, was sentenced to 7 years, 3 months in prison on June 29, 2005. Judith H. ‘Judy’ Hooper, who changed her identity and left the United States in the summer of 2000, was apprehended in March 2005 by the Royal Canadian Mounted Police and returned to the United States where she pleaded guilty and awaits sentencing. To date, 17 defendants have been sentenced in this case.

United States Attorney David Nahmias said of the case, ‘The evidence in this case showed that Chalana McFarland was a master of mortgage fraud. As a closing attorney she had a responsibility to ensure that buyers, sellers, and documents were real and truthful, but instead she corrupted the entire system for her own profit. This is one of the largest cases of mortgage fraud in this district which devastated a number of local communities, and we believe the 30 year sentence in this case is entirely appropriate.’

- contributed to by Ann Fulmer, President of GREFPAC

1. Interested in learning more.

   Posted by  on  02/11  at  08:53 AM

2. Where is justice? Why single out one person to give a stiff sentence.There were other person that had be in mortage fraud b/4 one that fled the country for a couple of years. And they were promise lighter sentence if they testified against that one person for a lighter sentence.  would you not lie?

   Posted by  on  06/25  at  10:45 AM

3. THIS ARTICLE DOES NOT MENTION THAT CHALANA IS REALLY FROM VALDOSTA, GEORGIA.  SHE GRADUATED IN 1986.  SHE THEN ATTENES FAMU IN TALLAHASSEE, FL. I KNOW THIS BECAUSE I WENT TO SCHOLL WITH HER FOR SEVERAL YEARS. SHE SURE HAS CHANGED. BUT THEN AGAIN, SHE WAS KIND OF SNEAKY WAY BACK THEN. I WOULD NEVER THOUGHT SHE WHOULLD HAVE GONE THIS FAR.  SHE ALWAYS PLAYED THE “GOOD GIRL” ROLE. I STILL DO NOT WISH 30 YEARS IN PRISON FOR HER. I THINK THAT WAS EXTREME. I KNEW HER FAMILY. I KNOW THIS IS HARD ON THEM BECAUSE SHE WAS NOT RAISED THAT WAY

   Posted by  on  10/11  at  08:01 PM