Thursday, November 13, 2008

Account Executive Pleads Guilty To Role In Mortgage Fraud Scheme

Jarvis Fontenette, 37, an account executive for various lenders, has pleaded guilty to conspiring to commit mail fraud and wire fraud as part of a scheme to defraud Houston, Texas area residential mortgage lenders.

At the hearing before U. S. District Judge Kenneth M. Hoyt, Fontenette pled guilty to the conspiracy charge, admitting that he and co-conspirators devised and operated a mortgage fraud scheme which involved the recruitment of individuals/borrowers to purchase residential properties at or near 100% financing using their good credit and using loan officers at mortgage brokerage offices to furnish false and fraudulent information to the lenders. Once the lender funded the loans, money was withdrawn from the transaction and shared among the conspirators.

Fontenette worked as an Account Executive for various lenders for a period of time during the life of the conspiracy and was the Account Executive on various loans obtained fraudulently during 2003 and 2004 by co-conspirators Michael Goodson, Nancy Booth, and Leslie Tarrance, Sr. Fontenette used his position to assisted his co-conspirators in getting fraudulent loans approved by the lender and received kickbacks for his assistance.

In 2005 and 2006, Fontenette worked with loan officer Nancy Booth and home builder Les Tarrance, Sr., d/b/a Ultra Classic Homes, along with at least two other individuals to obtain fraudulent residential mortgage loans on two Ultra Classic Homes. The Uniform Residential Loan Applications and supporting documentation contained material false and fraudulent information concerning the Borrower’s income and ability as well as incentive to repay the loans. The income used to obtain the loans in the Borrower’s name was grossly inflated. Fontenette and his co-conspirators also created the false pretense that these houses were each being purchased as the Borrower’s primary residence. The same Borrower was used to purchase two additional properties. On both occasions, fraudulently obtained mortgage loans were used to purchase the properties through misrepresentations concerning the Borrower’s creditworthiness.

Fontenette, acting as the loan officer, also obtained a loan in the name of the borrower for his own residence intentionally misstating the borrower’s assets and liabilities on the loan application. On multiple occasions, Fontenette caused this same residence to be flipped into the name of a new borrower and fraudulently obtained a new loan each time the loan neared default so he could continue to live in the house without have the financial burden of making the mortgage payment.

The conspiracy to commit mail fraud and wire fraud carries a maximum penalty of 20 years imprisonment, and a $250,000 fine in addition to any restitution which may be ordered by the court. Sentencing has been set for Feb. 9, 2009. Fontenette has been permitted to remain on bond pending sentencing.

Goodson, Booth and Tarrance have all been convicted for their roles in the mortgage fraud scheme. Booth and Tarrance are pending sentencing and have a range of punishment up to 20 years imprisonment. Goodson was sentenced to 293 months imprisonment.

This investigation leading to the charges was conducted by the FBI and the United States Postal Inspection Service. The case is being prosecuted by Assistant U. S. Attorney Melissa Annis.

mortgage fraud