Monday, September 17, 2007

4 More Indictments Handed Down in Ohio Mortgage Fraud Crackdown

Indictments were handed down in Cuyahoga County, Ohio in connection with four cases of mortgage fraud involving 26 individuals and entities and four houses in Solon, Ohio totaling over $2.6 million in fraudulent loans. These cases total 134 defendants and over $8.4 million in fraudulent loans for 60 properties located in ten communities: Shaker Heights, Oakwood Village, Cleveland, East Cleveland, Cleveland Heights, Solon, Pepper Pike, Garfield Heights, Brook Park, and Brooklyn, Ohio.

The first Solon, Ohio case involves Gerald Sizemore, 40, Sandusky, Ohio, who bought a new house at 35895 Sedge Circle on May 21, 2003 by fraudulently obtaining a loan for $441,000. He submitted false income and bank statements, claimed he had three rental properties to boost his assets, and claimed he was going to live in the house but had no intention of doing so. Also participating in this scheme was James Sims, a loan officer and owner of his mortgage broker company, Country Home Mortgage, Ohio. Sims was also indicted in another Solon, Ohio mortgage fraud case that Prosecutor Bill Mason filed in January, 2007. Also indicted was Carol McGlothin aka Smith, an agent and unlicensed broker for Country, who received $11,000 in “broker fees.” Robert Hawes and Robert Huff were indicted for assisting in providing a bogus down payment. Each defendant was indicted on several theft and forgery related charges. Each of these felonies carries maximum prison sentences ranging from one to five years. The house was in foreclosure and recently sold at a public auction; it is now vacant.

The second Solon, Ohio case involves Karl Whittingham, 30, Cleveland, Ohio. He bought a new house at 6749 Winston Lane for $725,000 in September 2005 by submitting false loan applications for a $500,000 first mortgage loan from Argent Mortgage Company, LLC, and a $188.750 second mortgage loan from GB Home Equity, LLC. He overstated his income by $100,000 and his bank accounts by $16,000 to these lenders. Whittingham also engaged in a scheme regarding the $36,400 down payment. No down payment was actually made because third parties engineered a scheme to deceive the lenders. Whittingham and the following were each indicted on ten or more theft and forgery related charges: Stephen Holman, Buckeye Lending, a licensed mortgage broker; Buckeye Lending, Inc.; and Theodore Caulkins, owner of and licensed broker at Buckeye Lending. Each of these felonies carries a maximum prison term ranging from one to five years. The house is now in foreclosure and is now vacant.

The third Solon case involves the home at 35532 Nightshade Lane, Solon, Ohio. Estelle Jackson, 63, Bedford, Ohio, fraudulently bought this house by obtaining a $625,000 loan from Meritage Mortgage Corporation. She falsely claimed that she made $122,400 as an account representative for L’Oreal USA, when she made approximately $38,000 as a machine operator for that company. She was a “straw buyer,” as she allowed Frederick Watkins, a licensed mortgage broker at Premier Funding of Ohio, Inc. to lease (with the option to buy) this property to unsuspecting renters who paid Watkins approximately $27,000 before they realized it was a scam. These unsuspecting renters thought their payments were sent to the lender to pay the new mortgage loan. Watkins kept this money and he never paid the mortgage in Jackson’s name. Jackson received $31,000 for the scheme that, in addition to Watkins and Premier, involved the construction company, Northcoast Construction, which was owned by Floyd Patterson, also a mortgage broker at Premier. Watkins, Patterson and Premier were indicted in January, 2007 in another Solon, Ohio mortgage fraud case. Each defendant was indicted on five or more theft and forgery related charges, which carry maximum prison sentences ranging from one to five years. This house is now in foreclosure.

The fourth case involves a new house at 38710 Flanders Drive, Solon, Ohio. Ogbonnaya Edeh, 49, Cleveland, Ohio, fraudulently obtained an $850,000 loan from New Century Mortgage Company. He never made a down payment, never saw the inside of the house before the purchase, and never lived in it. Edeh was employed as a local cab driver, but he falsely stated he made $150,000 as a structural engineer for Classic Tango Engineering, and Phillip Taylor, the owner of that company, falsely verified Edeh’s employment and income. Edeh received $31,000 for this scam. Brian Chenoweth, president of Widdershin One, Inc., and Ike Osuji, a middle man, who posed as a buyer, were also indicted for their involvement in this scheme. Edeh was a “straw buyer” in this scheme that involved other individuals, including Stephen Holman and Jeffrey Brown of Buckeye Lending, Inc. After Edeh purchased this house, Holman and Brown leased the home to a tenant, who signed the lease with Brown’s company, Marketing Land and Concrete, LLC. That tenant made rent payments that were intended to pay the new mortgage and these payments counted toward buying the home. However, the tenant lost his $6,000 initial down payment and $22,600 in lease payments before realizing it was a scam. Neither Brown nor Holman used these payments to pay the mortgage obligation to New Century. Each defendant was indicted on several theft and forgery related charges, which carry maximum prison terms ranging from one to five years. The house is now in foreclosure.

These indictments bring to 12 the total cases that have been indicted since the beginning of the year.  For more on the Prosecutor’s Office’s efforts to address these types of fraud and the foreclosure crisis, including a Q and A on mortgage fraud and predatory lending, visit the Cuyahoga County Prosecutor’s Office website: http://prosecutor.cuyahogacounty.us.

mortgage fraud

1. Thanks for this info, it is important to stay informed. I appreciate your expertise.

   Posted by  on  09/17  at  12:53 PM

2. Todays world and the people that think they can get away with this stuff… that’s what hurt those of us that try to do the right thing… I think that they shuold through away the key to the jail when these people are caught but the bad thing is that our laws protect people like this and the rest of us pay the price… I work to hard and do the right thing and its making my job harder because of the trust factor and those of us that want to do the right thing should stand up and be counted

   Posted by  on  09/19  at  04:43 AM

3. I am a victim of this fraud and I wish someone would catch the people involved that has robbed me of my financial and emotional state.  I have contacted so many people for help in Ohio as well as as California and as I fall into bankruptcy no one has helped and have been unable to find a remedy.  Two investment properties purchased in Ohio have ruined my credit and drained my finances including retirement fund.

   Posted by  on  02/29  at  08:25 AM

4. The four new indictments sound identical to deals a mortgage broker in Canton/Carrollton did.  Buying property under a dummy corporation and never living in one of the homes.  He was using monies borrowed from third parties to boost client bank accounts to get loans approved.  Amerimortgage, Inc. & Amerimortgage of Pennsylvania, Inc./Samuel P. Urban, President and Mortgage Broker.  Currently he is working for Wells Fargo in PA, doing perhaps the same bad deals.

   Posted by  on  07/29  at  04:11 AM