Wednesday, April 09, 2008
5 Plead Guilty to Mortgage Fraud
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.
mortgage fraud
Post a Comment
The trackback URL for this entry is:
Trackbacks:
|
Some Sources require Registration.
Mortgage Fraud Risk Index Jumps 11 Percent, According to Verisk Analytics Subsidiary Interthinx
CNNMoney.com
The report...indicates that the overall Interthinx Mortgage Fraud Risk Index surged more than 11 percent from the previous quarter...
Mortgage Fraud Case Appears Headed to Jury in Jackson County Circuit Court
The Jackson Citizen Patriot - MLive.com
The prosecution and defense rested Thursday in the mortgage fraud cases against Teresa Marie WIlson and Angelo Surveo Williams.
Wyoming Woman Charged with Mortgage Fraud After Allegedly Stealing Sister's Identity
MLive.com
A Wyoming woman is facing felony charges accusing her of stealing her sister's identity to obtain a mortgage...then defaulting on that mortgage, leaving taxpayers on the hook.
U.S. Attorney Targets White-Collar Crime
Wall Street Journal
In San Francisco, Mr. Russoniello said he is trying to crack down on cases like mortgage fraud, though he doesn't have the budget to hire additional white-collar prosecutors.
Arrests Made in Orlando Mortgage Fraud Roundup
MyFoxOrlando.com
During the real estate boom two years ago, some units were going for a half million dollars. Now some are short selling for just 50 grand.
10 Accused of Mortgage Fraud at PR Coastal Resort
Forbes
A developer and nine other people, including a former salsa singer, have been charged in an alleged $14 million mortgage fraud in Puerto Rico...
Strodtman Jury Selected in Mortgage Fraud Trial
Greeley Tribune
Attorneys will deliver opening statements this morning in the trial of Mark Strodtman, who is accused of bilking homeowners in a mortgage scheme years ago.
FHA Digging Out After Loans Sour
Wall Street Journal
Most banks rejected Ms. DeForte because her debt level was too high and her credit score too low. But Lend America put Ms. DeForte into a $402,000 loan backed by the Federal Housing Administration...
Mortgage Fraud Probe Nets 105 Across State
Bradenton Herald
At least one local man is among 105 people arrested across the state following a nine-month investigation into organized mortgage fraud.
Mortgage Fraud Increases
MortgageRates.co.nz
The number of frauds involving professional advisors, such as accountants and lawyers, has increased from two to four since March 2008.
Previous Articles
|
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.
More Trial Coverage
|
|
|
|
|
|
|
|
|
|
|
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 
