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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99 Fraudulent Indiana Loans X $3.4M Losses = 7 Years
Kenneth McKinney, 40, Indianapolis, Indiana, was sentenced to 84 months imprisonment following his previously entered guilty plea to conspiracy to commit wire fraud and conspiracy to commit money laundering in connection with a multi-million dollar mortgage fraud scheme that occurred in Indianapolis, Anderson, and other locations within the Southern District of Indiana, and elsewhere. The fraud scheme utilized inflated appraisals of real property, loan applications with false information to make borrowers appear more creditworthy, and kickbacks to participants.
According to authorities and court documents, McKinney was a licensed mortgage broker and president and co-manager of American Savings Mortgage ( ASM) with co-defendant Pamela Martinez. ASM was a mortgage brokerage company doing business in Indianapolis, Indiana. ASM obtained financing for the purchase of residential properties in cities throughout Indiana, including Indianapolis, Marion, Fairmount, Kokomo, and Anderson, Indiana, from various financial institutions, including First Bank, Inc.,Louisville, Kentucky.
ASM would prepare false loan application packages for buyers and submit fraudulent documents to mortgage lenders in support of the buyers’ loan application packages on the buyer’ s behalf. Relying on the inflated appraisals and false information in the loan applications, the lender, First Bank, would wire funds to Anchor Title, Anderson, Indiana.
The transactions would close at Anchor Title. McKinney and other co-conspirators would receive checks from the excess loan proceeds after closing the transactions.
McKinney’ s role in the scheme was to bring together sellers, such as co-defendants Joseph Britton and Mark Speckman,(who were convicted on September 22, 2006, following a two-week trial) with the ultimate buyers of the real estate, who would pay an inflated purchase price based upon inflated appraisals procured by McKinney. The sellers, Britton and Speckman, provided McKinney a list of real property that they had available for sale which included the inflated values which needed to be used in order for Britton and Speckman to make a profit and for all the participants in the scheme to receive their kickbacks (called “ referral fees” by the participants). McKinney provided this list of properties, which set forth the inflated value for the properties, to the appraiser, James Spicer, who has pled guilty in the case and awaits sentencing.
For example, in June or July 2002, defendant Britton found property for sale located at 948 N. Oakland Avenue, Indianapolis, Indiana, intending to buy and then sell the property to a third person using an inflated appraisal and purchase price and share the proceeds from the inflated selling price. At the same time, other defendants recruited Richard Pollett to be the second buyer of this property.
On or about July 10, 2002, McKinney contacted Spicer to falsely appraise the property located at 948 N. Oakland Avenue as being worth $60,000.00. Spicer provided the certified appraisal alleging that the property was valued at $60,000.00.
On or about July 11, 2002, Britton, doing business as Aspen Group, LLC, purchased the 948 N. Oakland Avenue property for its fair market value of $10,900. Pollett agreed to purchase the property at 948 N. Oakland Avenue, Indianapolis, Indiana for an inflated price of $48,000, which is 80% of the inflated value. Pollett received funds for his role as the purchaser.
In July 2002, in order to secure a loan for the inflated purchase price, ASM caused false information to be provided on behalf of Pollett to First Bank, Inc., for the purchase of the property. The false information included the inflated appraisal from Spicer and false information as to Pollett’ s income and employment, overstating his assets to make him appear more creditworthy.
On or about July 26, 2002, Britton purchased an official check from Union Federal Savings Bank in the amount of $7,029.18, to be used as Pollett’ s down payment for the purchase of the Oakland Avenue property, to further mislead the lender into believing Pollett would have equity in the property.
Based on false and fraudulent information provided to First Bank that financial institution agreed to fund the loan to Pollett for the purchase of the Oakland Avenue property and, on or about July 26, 2002, caused funds in the amount of $46,532.22 to be wire transferred from First Bank, to the title agent, Anchor Title. After the loan closing at Anchor Title, the excess loan proceeds, that is, the difference between the fair market value of the property and the amount of the loan, were distributed in various amounts among the participants in the scheme as set forth herein.
On or about July 26, 2002, co-defendants Britton and Speckman sold a total of twenty-eight properties in Indianapolis, Indiana to Pollett and co-defendant James McClung, via ASM. All of the loan closings included false financial information as described. A total of over $1.3 million dollars in fraudulently obtained loan proceeds was disbursed to three companies controlled by Britton and Speckman: Aspen Group, Pacific Group, and Home Source Investments.
After these funds were deposited into three separate accounts at Union Federal Bank, Britton and Speckman wrote 29 checks totaling approximately $430,000 to Senicure Investment Group to fund kickbacks to the other participants in the scheme. These checks were deposited into an account controlled by McKinney at Bank One in the name of Senicure Investment Group. McKinney then wrote a series of checks on the Senicure account from these proceeds to pay Martinez, McNair, Wilcox, himself, and indirectly, the buyers for their parts in the scheme. The Senicure account was used to hide the nature and source of these funds. McKinney wrote himself a check for $71,000.
The scheme in which McKinney participated involved a total of ninety-nine fraudulent loans, which resulted in a criminal loss figure of approximately $3,398,600.
Patricia Wilcox-McClung, 40, Kokomo, Indiana, was sentenced to 37 months following her previously entered guilty plea to conspiracy to commit wire fraud and conspiracy to commit money laundering. Wilcox-McClung recruited buyers in the scheme acting through a company called VP Development, and provided false documentation that the borrowers had jobs earning income that was submitted to the lender to obtain the loans. Wilcox-McClung will also serve three years supervised release following her prison term and was ordered to make restitution in the amount of $1,492,200.
Three defendants ( Britton, Speckman and Michael C. Smith) await sentencing after their conviction at trial on September 22, 2006 in the mortgage fraud scheme. Seven more await sentencing following guilty pleas. Doris Walker Jones was sentenced to 21 months last week following her guilty pleas to conspiracy to commit wire fraud and money laundering in connection with the same scheme.
Fraud is going to cause the whole financial system to crater.
Posted by on 07/23 at 09:37 AM
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Posted by on 07/26 at 08:46 PM
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Posted by on 07/31 at 11:00 AM
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Posted by on 08/06 at 06:07 AM
Carrington needs shut down like New Century, they keep trying to add overly inflated insurance cost to my account. They say there was a period of time that the property was not insured. Provided them with documentation and they claim they nevr get it. What can I do to shut this company from destoying my credit and stealing my money? Any help is appreciated
Failed Mortgage Firm Trustee Allowed $50,000 in Fees Union Leader
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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.
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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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