Thursday, November 29, 2007

3 Guilty Pleas in Kentucky Fraud Scheme

Edward “Ted” House, Nathan Frisbie and Jerry Crenshaw, all of Louisville, Kentucky, pleaded guilty to conspiracy to commit wire fraud and bank fraud. House pleaded guilty on November 28, 2007.  Crenshaw pleaded guilty on October 31, 2007, and Frisbie pleaded guilty on October 24, 2007.  The Indictment also charged Khalid Raheem with similar charges and he remains pending trial, although the Court has yet to set a trial date.

The indictment to which they pleaded guilty charged that between January 1, 2000, and May 30, 2003, House and Crenshaw, along with Frisbie and Khalid Raheem, conspired with one another to defraud two residential mortgage lenders.  The indictment identifies 24 separate fraudulent loan transactions, totaling approximately $1.5 million, in which the named defendants participated.  They defrauded the mortgage lenders through various means.  Generally, they provided the lenders with false borrower background information in order to fraudulently induce the funding of individual loans.  The defendants would provide lenders with false employment and financial information of an applicant in order to get a loan approved.  In addition, they would often misrepresent the payment of earnest money or a deposit from a buyer to a seller.  The lenders relied on all these false representations in order to make its decision whether to fund a loan. 

House, Frisbie, and, Raheem were fraudulently involved in a $63,750 mortgage loan for the purchase of property located at 801 Dearborn Street, Louisville, Kentucky.  In order to fraudulently induce the lender, ABN Mortgage Group, to fund the loan, they provided false and fraudulent information in support of the loan.  The fraudulent information included the following:  false and fraudulent employment information of the buyer and a closing statement that reflects a fraudulent sales price in that no earnest money or deposit was actually paid by the buyer.  Count 1 of the Indictment alleges 21 separate instances in which the defendants conspired to defraud mortgage lenders through manners similar to the above example.

The indictment further charges the defendants with wire fraud and bank fraud.  For example, Count 2 charges House, Frisbie, and Crenshaw with obtaining a $59,850 loan for property located at 2712 Algonquin Parkway, Louisville, Kentucky, from National City Mortgage Company under false and fraudulent pretenses.  They defrauded National City by providing false information regarding the buyer’s employment and financial information, as well as misrepresenting funds paid by the buyer to the seller.  Counts 3 through 5 charge the defendants with similar schemes involving different properties and different lenders.

The case is being prosecuted by Assistant United States Attorney Bryan Calhoun, and it was investigated by the Federal Bureau of Investigation.  The plea was entered before Thomas R. Russell, Judge, United States District Court, Louisville, Kentucky. A sentencing date for House, Frisbie and Crenshaw will be scheduled at a later time.

mortgage fraud

1. You need to check your facts before writing an article. The lenders only required limited documentation on borrower information, only a credit score of 620+ which all loans qualified.  Fair to pass judgement?  Do you take personal injury cases?  Do you only collect money if your client collects a settlement?

   Posted by  on  04/29  at  03:40 PM