Mortgage Fraud Blog is the premier website for news and information on mortgage fraud and real estate fraud throughout the United States.
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 Smith Dollar, PC, is licensed to practice law in California and maintains offices in Santa Rosa, California. Email Ms. Dollar
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Sharon Chamberlain, 40, Pittsburgh, Pennsylvania, and Ericka Stanford, 35, Carnegie, Pennsylvania, pleaded guilty to one count each of Participating in a Wire Fraud Conspiracy before United States District Court Judge Joy Flowers Conti. Stanford also pleaded guilty to one count of Money Laundering.
Andrea Revak, 47, Pittsburgh, Pennsylvania, and Aaron McCarthy, 43, Pittsburgh, Pennsylvania, pleaded guilty to one count each of Participating in a Wire Fraud Conspiracy before Chief United States District Court Judge Donetta Ambrose.
Marlin Sprouts, Jr., 52, Uniontown, Pennsylvania, pleaded guilty to one count of Participating in a Wire Fraud Conspiracy before United States District Court Judge Terrence McVerry.
In connection with the guilty pleas of Chamberlain and Stanford, Assistant United States Attorney Brendan T. Conway advised the court that Leon Truskowski and Colleen Chiavetta operated a mortgage broker business, located in Pittsburgh’s West End, called People’s Home Mortgage that assisted borrowers in obtaining financing to purchase homes. Stanford was employed by People’s Home Mortgage, and she, with the assistance of other members of the conspiracy, submitted loan applications on behalf of borrowers that contained material misrepresentations about the borrowers’ financial condition. Stanford and her co-conspirators also submitted false documents in connection with the loan applications, including but not limited to, appraisals that inflated the true value of the properties, appraisals that represented that they were prepared by licensed appraisers when they were really prepared by unlicensed appraisers, and employment and income verification documents that misrepresented the borrowers’ employment status and overstated the borrowers’ income. In addition, the conspirators arranged for the payments associated with the loan transactions to be distributed contrary to the representations to the lender about how the loan proceeds would be distributed, and they inflated sales prices so that the conspirators could obtain money at the real estate closings.
Chamberlain was a conspirator in this scheme in that she acted as a buyer and borrower knowing that the loan applications contained misrepresentations and that many of the supporting documents submitted to the lending institutions were fraudulent.
In connection with the guilty pleas of Revak and McCarthy, Assistant United States Attorney Brendan T. Conway advised the Court that Jason Jester and Randy Carretta operated Precision Mortgage, a Carnegie mortgage broker business that assisted borrowers in obtaining financing to purchase homes.
Jester and Carretta submitted loan applications and associated documents knowing that the loan applications contained fraudulent representations about the financial condition of the borrowers and that the documents were fraudulent. The fraudulent documents included, among others, verifications of employment, verifications of deposit, appraisals, pay stubs, and W-2s.
Kelly Fields and Joyce Davern worked as loan originators recruiting individuals to purchase properties in the mortgage fraud scheme. They submitted to the lenders loan applications that they knew contained misrepresentations and documents that they knew were fraudulent.
McCarthy participated in the conspiracy by agreeing to be paid a portion of the loan proceeds for construction work performed or to be performed on the collateral underlying the loan, when in fact there had been no construction work performed and there was no expectation of construction work to be performed. These funds would then be used to pay members of the conspiracy.
Revak had several roles in the conspiracy. One role was the knowing buyer. She purchased approximately six properties in this process, and the documents used were fraudulent. Another role entailed her acting as an assistant to Kelly Fields in arranging for fraudulent appraisals and processing paperwork associated with the fraudulent loans.
In connection with the guilty plea of Marlin Sprouts, Jr., Assistant United States Attorney Brendan T. Conway advised the Court that Sprouts participated in a mortgage fraud conspiracy with Michael Pope, James Spike, and Tiffany Sprouts.
Michael Pope and Tiffany Sprouts, through Sprouts Mortgage and Pope Financial Services, recruited at least six different straw buyers with favorable credit scores to separately apply for mortgage loans from various financial and mortgage lending institutions to obtain funds and to purchase residential real estate selected by Pope and Tiffany Sprouts. Pope and Tiffany Sprouts created and obtained false and fraudulent documents in connection with the mortgage loans, including the following:
(a) applications;
(b) financial statements;
(c) verifications of deposit;
(d) verifications of rent or mortgage;
(e) verifications of employment;
(f) property leases; and
(g) wage statements.
Pope and Sprouts created and obtained the false and fraudulent documents to inflate the straw buyers’ employment and financial condition, to overstate income and assets, in order to increase the dollar amount that could be borrowed against the properties. They also used appraisals with an inflated opinion of market value of the properties in order to increase the dollar amount that could be borrowed against the properties.
In addition, Pope and Tiffany Sprouts temporarily deposited funds into bank accounts of the straw buyers to make it appear that the straw buyers had sufficient assets to qualify for the loans and to make the down payments. They also created false lease agreements purporting to show that the straw buyers would be renting to others the properties the straw buyers owned to conceal the true domicile of the straw buyers and to make it appear that the straw buyers had a source of income.
Pope and Tiffany Sprouts repeatedly engaged in this conduct over a four and a half year period from June 2002 to December 2006, involving millions of dollars of loans. The properties involved were located, among other places, in Peters Township and Upper Saint Clair, Pennsylvania.
James Spike and Marlin Sprouts, Jr. participated in the conspiracy by agreeing to act as the buyer and borrower, knowing that the loan applications submitted on their behalf contained fraudulent information. James Spike and Tiffany Sprouts have already pleaded guilty and are awaiting sentencing.
Judge Conti scheduled sentencing for Chamberlain and Stanford for July 11, 2008 and September 12, 2008, respectively. Judge Ambrose scheduled sentencing for Revak and McCarthy for September 5, 2008 and September 11, 2008, respectively. Judge McVerry did not schedule a sentencing date for Sprouts.
The law provides for a total sentence of 20 years in prison, a fine of $250,000, or both for all of the defendants except for Stanford, who faces a maximum possible sentence of 30 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentences imposed are based upon the seriousness of the offenses and the criminal history, if any, of the defendants.
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.
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...
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...
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...
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...
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The information and notices contained on Mortgage Fraud Blog are intended to summarize recent developments in mortgage fraud cases and mortgage banking matters nationwide. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about mortgage banking, mortgage fraud matters or who believe they require legal counsel should seek the advice of an attorney. The creators, editors and sponsors of Mortgage Fraud Blog do not intend to create a confidential relationship or an attorney-client relationship by communication via or arising from this site.
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 
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