Friday, February 29, 2008

2 Sentenced in Montana For Misreps to Lender

Scott William Hilgers, 34, and Todd Jeremy Rice, 34, both of Helena, Montana, were sentenced in connection with their guilty pleas to conspiracy to scheme to defraud mortgage companies/wire fraud.  Hilgers was sentenced to a term of 60 months in prison, a special assessment of $100, restitution in the amount of $1,539, and 5 years supervised release.  Rice was sentenced to a term of 12 months in prison, a special assessment of $100, restitution in the amount of $1,539, a $15,000 fine, and 5 years supervised release.

In 2004, Hilgers, a Helena, Montana mortgage broker, was introduced by a local realtor to Rice. Beginning in October of 2004, Hilgers assisted Rice in obtaining 100% financing on four residential properties in the Helena, Montana area.

Hilgers worked for a company called TriWest Mortgage.  Between October of 2004 and October of 2005, Hilgers brokered mortgages for Rice’s purchase of four residences in the Helena area.  The total mortgage liability was over $686,000.  All properties were financed to 100% of their value.  Rice did not have sufficient income to justify the mortgage exposure caused by any one of these mortgages, much less all of them.  Hilgers and Rice then agreed to have Rice concoct fictitious income documentation for the mortgage file.  Using his computer, Hilgers generated counterfeit W-2 forms and wage statements that indicated that Rice was employed by either Davron Telco (2002-2003) or Northwest Wireless (2004-2005).  The two reported to the mortgage file that Rice was employed by Davron in 2002 and had made $51,975, when in truth, Rice had not worked for Davron.  False documents attached to the file indicated that Rice had made $54,926 from employment with Davron in 2003, when in truth, Rice had not worked for Davron and had a reported gross income of only $28,515 in 2003.  The paperwork indicated that in 2004, Rice earned $67,815 from Northwest Wireless, when in truth, Rice had not worked for Northwest Wireless in 2004 and had a reported gross income of only $19,170 for that year.  Finally, Hilgers and Rice put documentation – a purported wage and earnings statement – into the mortgage files that Rice had been paid by Northwestern Wireless $48,489 as of August 31, 2005, when in truth Rice had not been paid any wages by Northwestern Wireless. 

A borrower who is going to use the purchased property for his own personal residence can, under certain circumstances, qualify for 100% financing.  For the purchase of the four aforementioned properties, Rice represented on Fannie Mae Forms 1003, Occupancy Statements and Loan Applications, that each residence would be his primary home.  In addition, he made the same representation in the purchase of two other Helena properties through another mortgage broker.  However, except as necessary to make minor repairs, Rice never occupied the residences and rented them out.  This placed the ultimate purchasers of the mortgage fraudulently obtained at greater risk, and allowed Rice to obtain a better interest rate than would have been negotiated had the two men been honest in their representations as to occupancy of the residences.

Three separate mortgage companies purchased the mortgages on the secondary market.  Representatives of each company have confirmed that had they been aware of the falsifications in the mortgage files created by Hilgers and Rice, they would not have funded the mortgage proposals for these properties.  Using that as a guide for loss on the four properties charged in the indictment, the loss is approximately $686,000 to the mortgage companies and over $11,242 to TriWest (for the commissions they paid Hilgers for the fraudulent mortgage packages).

If compelled to fund the mortgages, the companies would have charged higher rates of interest.  Using that as a basis for loss on the properties, Hilgers and Rice would have defrauded the secondary mortgage companies in an approximate amount of $70,139. 

Because there is no parole in the federal system, the truth in sentencing guidelines mandate that they will likely serve all of the time imposed by the court.  In the federal system, they do have the opportunity to earn a sentence reduction for good behavior.  However, this reduction will not exceed 15% of the overall sentence.

mortgage fraud

1. Making Fake w-2s is absolutely dispicable.  These two got what they deserved.

   Posted by  on  02/29  at  07:22 AM

2. Meanwhile, after scamming over two million dollars, I’m still as free as a bird. Wheee!! No one will ever arrest me. 

   Posted by  on  03/02  at  02:58 PM

3. That’s what happens when you mess with the law.

   Posted by  on  03/22  at  11:34 AM

4. Montana, were sentenced in connection with their guilty pleas to conspiracy to scheme to defraud mortgage companies wire fraud. Hilgers was sentenced to a term of 60 months in prison, a special assessment of $100, restitution in the amount of $1,539, and 5 years supervised release.  Rice was sentenced to a term of 12 months in prison, a special assessment of $100, restitution in the amount of $1,539, a $15,000 fine, and 5 years supervised release.
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   valrossie
   Montana Drug Addiction

   Posted by valrossie  on  08/23  at  04:38 AM

5. What the article doesn’t say and wouldn’t because it would look bad on their part is Todd has had and still does have a learning disablity and this Scott guy knownly took 90% full advantage of that.  Todd was at fault but Scott was to blame for this mess.  He has a pass criminal background of similar convictions. Todd did deserve some punishment but not what he got.

   Posted by  on  09/16  at  01:34 PM