Tuesday, June 03, 2008
Appraiser Admits To His Part In $25M Mortgage Fraud Scheme
Lanny Ross, 66, Leawood, Kansas, pleaded guilty to one count of conspiracy in a $25 million mortgage fraud scheme.
In his plea, Ross, a real estate appraiser, admitted he and co-defendants conspired to commit bank fraud and money laundering in a scheme to manipulate home buyers and housing appraisals, and to submit fraudulent mortgage loan applications to federally insured lenders.
Co-defendants in this case who already have entered guilty pleas include: Judy Brumble, Steve Middleton, Angela Parenza, and Elizabeth Hessel. Co-defendants awaiting trial include F. Jeffrey Miller, Todd Earnshaw, Brian Rouse, and James Moser.
In his plea, Ross admitted the conspirators produced advertising offering home buyers with poor credit and financial problems the opportunity to buy homes built by Jeffrey Miller with little or no down payment. By establishing a one-stop shop where buyers could choose a home and apply for financing, the conspirators were able to control the flow of information submitted to lenders. The conspirators used fraudulently inflated real estate appraisals to cause lenders to make loans up to, and in excess of, 100 percent of the property values. They also encouraged buyers to move into the homes before closing and then increased the price of the houses at closing. As a result of the fraud, lenders issued more than $25 million in loans.
Ross is set for sentencing Sept. 8, 2008. He faces a maximum penalty of 5 years in federal prison and a fine up to $250,000.
U.S. Attorney Eric Melgren commended the Internal Revenue Service – Criminal Investigation, Housing and Urban Development – Office of Inspector General, Assistant U.S. Attorney Richard Hathaway, and Assistant U.S. Attorney Christine Kenney for their work on the case.
mortgage fraud
Amazing that documented evidence of fraud was found in 1999, Indicments came out in the spring of 2006 and still no trial, no one in prison, and there will never be restitution to the real victims, the homebuyers.
Posted by on 06/04 at 06:34 PM
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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.
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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 
