Thursday, March 06, 2008

2 Charged With Mortgage Fraud Involving 36 Properties

Beverly Ross, 49, and Donella Locke, 58, were arrested after being indicted on January 30, 2008, by a federal grand jury sitting in Indianapolis for wire fraud and conspiracy to commit wire fraud. Ross was also indicted separately for six felony counts relating to bankruptcy fraud.

The indictment alleges that Ross and Locke conspired together to find buyers for 36 high dollar houses in the Hamilton, Hancock, and Marion County, Indiana areas. They purportedly told buyers that they needed to use their credit for several months to buy the house, but that the buyers would not actually be making any payments because Ross and Locke had different occupants who would rent the house and make the payments. Ross and Locke then allegedly caused fictitious documents to go to the lending institutions, including false statements about buyers bringing down payment funds and inflated income amounts of the buyers. Ross and Locke also purportedly knew that double settlement statements were created, specifically, one that showed the true sales price given to the sellers of properties, and one with an inflated sales price given to the lending institution for the purpose of obtaining more money. With many of the properties, the lenders thought that Ross and Locke were going to do construction work on the property raising its value. After closing, Ross and Locke benefitted from these transactions. No construction work was ever done. Few payments were actually made. Buyers did not bring down payment funds. Buyers did not authorize their incomes to be inflated on applications to the lenders.

Ross was associated with the business names Design Masters, Rose Ross Realty, and Ross and Ross Investments. Locke was associated with Locke and Key Investments, and variations of this name such as L&K Interior Designs, Locke & Key Real Estate, and L&K Investments.

In Ross’s separate bankruptcy fraud indictment she is alleged to have filed five separate petitions for bankruptcy, but then failing each time to follow-up with schedules as required by the

bankruptcy process. Her motive for four of them was to stop sheriff’s sales on properties that she had purchased in her name, or properties purchased in a relative’s name, because she had not

made payments. Ross failed to list all the prior filings for bankruptcy in the previous eight years as required by the petitions she filed.

“These schemes are complex and take an enormous amount of investigation along with expertise to secure evidence and prosecute,” Indiana Attorney General Steve Carter said. “Our

Homeowner Protection Unit is taking action against licensed appraisers and real estate agents that are related to this scheme and will pursue others licensees found to be involved. The pursuit

of the individuals who masterminded this specific scheme and harmed numerous individuals in the process is a positive step in Indiana’s fight against foreclosures and mortgage fraud.”

mortgage fraud

1. I think we need to see how much this type of activity played a part in the current lending crisis affecting the real estate industry.

   Posted by  on  03/07  at  05:32 AM

2. So what is the relief that the people who were targeted received?  The consumers that this ultimately affects.  Did they have to file bankruptcy?

   Posted by  on  03/27  at  07:21 AM

3. Instead of reacting to mortgage fraud,real estate and mortgage professionals should take a proactive approach. Many tool’s have been developed to raise fraud’s red flag,this could have been prevented on the first house.

   Posted by  on  04/15  at  09:22 AM

4. What is KSDK? (something tells me it’s a dumb question:D)

   Posted by  on  05/09  at  06:49 AM

5. Friday Sept. 18 2009, Donella Locke was found guilty on all 5 counts of interstate wire fraud, for which she was charged in Indiana’s U.S. District Court, under Judge McKinney.

   Posted by  on  09/20  at  09:21 AM

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Today's News

Some Sources require Registration.   Marco Island Man Arrested in Ohio on Grand Theft Charge Naples News A man who claimed he was a broker is accused of bilking a long-time family friend out of more than $130,000. Failed Mortgage Firm Trustee Allowed $50,000 in Fees Union Leader U.S. Bankruptcy Court Judge J. Michael Deasy will approve $50,000 in legal fees for the trustee of failed mortgage brokerage businesses Financial Resources Mortgage Inc. and CL&M Inc. Bend Oregon Event to Help Homeowners Prevent Foreclosures Oregon.Gov As part of an ongoing effort to help homeowners avoid foreclosure, state agencies are organizing a foreclosure-prevention event in Bend on Saturday, March 27, 2010. Shelbyville Man Gets 2-Year Sentence For Loan Fraud Chattanoogan.Com Prosecutor Gary Humble said the lost was approximately $2.3 million in the mortgage fraud involving hundreds of homes in the Shelbyville area. Lend America, VP Ashley Banned from FHA Housing Wire Michael Ashley, the embattled former vice president of Federal Housing Administration (FHA)-backed mortgage originator Lend America, and the company he worked for, were permanently banned from doing business in the industry last week. Countrywide Tries to Pin Blame on Insurer Court House News Countrywide Home Loans demands $111 million from Triad Guaranty Insurance, claiming Triad is trying to blame mortgage lenders for the insurer's role in the housing bubble and collapse. Investors Say They Were Swindled in Property Scheme Fox 13 Now Utah Division of Consumer Protection is joining forces with a few investors who claim they have been cheated by an agency called "Utah Mini Ranches. Greenfield Man Accused of Housing Scam The Republic A former real estate agent conned at least eight people by renting them properties actually owned by a federal agency and then running off with their deposits, prosecutors said. Appraisal Institute Opposes Obama Administration's Plan for Homeowner 'Short Sales' PR News Wire Citing concerns about increased mortgage fraud, four organizations representing more than 35,000 real estate appraisers today voiced their opposition to changes to an Obama administration program that will encourage "short sales" of homes. Ownership Rights to Get Another Look TBO.Com State lawmakers may beef up protections of property owners' rights by rewriting a law this spring that is at the center of a case of alleged fraud in Pasco County. Previous Articles

TRIAL COVERAGE

Trial coverage provided by Anne Mitchell, Crazy Fish Realty. Follow Anne on Twitter. Thursday, February 18, 2010 F. Jeffrey Miller Trial - 1 Convicted, 3 Acquitted The jury deliberated for approximately 3 days after receiving their jury instructions. They asked one question: Does ‘common sense' allow us to deduce what the banks may or may not been influenced by in order to make a loan? Judge Julie Robinson responded by admonishing the jurors to read all of the instructions. The jury presented its' verdict... Read More... Thursday, February 18, 2010 F. Jeffrey Miller Trial Continued Testimony As reported by Anne Mitchell, who viewed the trial: Angela Parenza worked for Jeff Miller as the office manager for 7 or 8 years beginning in 1998. Parenza was indicted along with Miller and pled guilty to conspiracy to commit bank fraud and money laundering. Parenza testified that Miller or his contractors allegedly preferred to build all the... Read More... Wednesday, February 10, 2010 F. Jeffrey Miller Trial Coverage Continued - Witness Testimony Steve Middleton Testimony - Coverage Provided by Anne Mitchell The Government continued in its cross examination of Steve Middleton. He was shown several HUD-1 statements involving sales of homes located in Overland Park, KS, and Olathe, KS. The HUD statements each allegedly showed line items of payments to (James) Moser & Associates, LLC's... Read More... Monday, February 01, 2010 F. Jeffrey Miller Trial Coverage - Continued Witness Examination According to Anne Mitchell, who is present in court for the trial: Next Witness: Kelly Sanford Kelly Sanford of the Federal Reserve was a short witness for the Government. Sanford manages electronic payments between banks and member financial institutions. He was shown copies of wire transfers and asked whether they coincided with the counts in... Read More... Wednesday, January 27, 2010 F. Jeffrey Miller Trial - Prosecution Witnesses Continued According to Anne Mitchell, who is viewing the trial: January 13, 2010 Witness: Rick Hayes Rick Hayes testified that on the day that he closed on his Miller Enterprise home, he received a phone call from the Kansas Banking Commission informing him that his loan was fraudulent. After the Hayes responded to a classified ad, they met with John... Read More... More Trial Coverage

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All Foreclosure Information and Resources Housing Storm Calculated Risk Mortgage Lender Implode-O-Meter Home Gain Blog Rain City Guide Real Estate Tomato Blood Hound Blog Appraiser Active Fraud, Phishing and Financial Misdeeds The Collar - US News and World Report Georgia Bankruptcy Blog Fighting Fraud Newsday Real LI Matrix