Friday, March 07, 2008
4 Indicted In Texas Mortgage Fraud Scheme
A nine-count indictment charging four individuals with participating in a mortgage fraud scheme in the Houston, Texas area over a four-year-period allegedly grossing millions has been unsealed.
Carlos Paul Gonzalez and Ken Russell Browder, who together operated several Houston area businesses including Advantage C&R Funding Group and First Advantage Funding Group, and Jannice Bonner and Machell Halstead, two Escrow officers involved in the closing of residential real estate transactions at various Houston area title companies, are accused of conspiracy to commit wire and mail fraud and multiple substantive counts of wire fraud.
The Indictment was unsealed following the arrest of Gonzalez, Browder and Halstead by investigating agents in Houston. A warrant remains outstanding for the arrest of Bonner. Browder appeared before U.S. Magistrate Calvin Botley and was ordered released on bond. Gonzales and Halstead appeared before Judge Botley Tuesday, March 4, 2008, and have also been ordered released upon posting bond pending trial of the case.
The scheme alleged in this indictment involved numerous purchases of residential properties throughout the Houston and surrounding area through alleged misrepresentations and false pretenses made to various mortgage lenders concerning the borrower’s ability and incentive to repay the mortgage loans. The scheme, which allegedly was in operation between January 2002 through November 2005, is alleged to have generated fraudulently-induced loans in an amount exceeding $15 million.
According to the indictment, Carlos Paul Gonzalez and Ken Russell Browder worked at a Houston branch of a Mortgage Broker’s Office. Jannice Bonner and Machell Halstead worked at various title companies in Houston as Escrow Officers closing residential transactions. Gonzalez and Browder are accused of recruiting individuals to act as borrowers and apply for mortgage loans to purchase these properties. Operating under various business names, the indictment alleges Gonzalez and Browder arranged for the purchase of the properties and would then receive proceeds from the fraudulently-induced loans into bank accounts held in the names of these businesses from the closing transactions held at the title companies. Bonner and Halstead are accused of preparing and disseminating closing documents used to close these real estate transactions and fund the loans and then disbursing the loan proceeds through the Escrow Accounts of the title companies.
Upon conviction, each of the nine counts carries a maximum penalty of 20 years in a federal prison and a $250,000 fine.
mortgage fraud
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
F. Jeffrey Miller Update - October 20, 2009
A hearing was held in Topeka, Kansas in front of Judge Julie Robinson. Miller is currently being held pending his sentencing which is set for December 22nd, 2009 at 9:00 a.m.. Steve Vanatta and Hallie Irvin, Miller's codefendants, will be sentenced at that time also.
Several motions were heard this week. One was a motion for Miller to be released pending his sentencing. Miller's attorney, Jeff Morris, argued that the court had dismmissed with predjudice the matter involving Miller's purchase of a commercial lawnmower, violating the court ordered monitoring agreement. He also argued that Miller was not a flight risk and should be released. This motion was denied.
Another motion heard by Judge Robinson was that of an escrow account containing proceeds from the sale of Miller's forfeited assets. This account has a balance of $143,000. Attorney Morris argued that his firm was due $100,000 for work done in the Miller matter, to date. The government argued that his 'un-itemized fees' were 'exhorbitant'. The balance of the funds, Morris argued, should be released to the Miller family to help pay for mounting household expenses.
The government argued that the 'Asset Forfeiture Provision' applies down to 'the last penny' and that 'the rights of the victims to made whole are of paramount immportance' and that no routine household expenses like Visa bills, are allowed.
Attorney Morris argues that there is more than enough assets to satisfy the jury's judgement of $2.65 million dollars. The government argues that the estimated value of his assets are only $1.4 million.
The government also stated that Miller has been paid dividends from a company Miller has an ownership interest in; Boreflex. From July, 2008 to present, Miller has been paid $330,509.30 from Boreflex, unbeknownst to the court appointed monitor.
Present in the courtroom was Todd Earnshaw. Earnshaw was indicted along with Miller and others in what is commonly referred to as 'Miller I'. That trial is scheduled to begin on January 11, 2010 in Topeka, Kansas.
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Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
