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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William E. McKanry; his son, William C. McKanry and mortgage broker Paula Enders have been indicted on bank, wire and mail fraud charges involving the multimillion dollar sale of twelve properties.
William C. McKanry owned, operated and managed USA Title, LLC; William C. McKanry and his father, William E. McKanry, owned, operated and managed USA Properties, LLC; and Paula Enders was a licensed mortgage broker. She operated under the mortgage brokerage company known as Foundation Mortgage, Inc. Between December 2005 and January 31, 2006, the McKanrys’ sold twelve real estate properties through Enders. The properties are located in Florissant, St. Charles, O’Fallon, Hazelwood, Lake St. Louis, Ballwin, St. Louis City and County, Missouri. The total sale price of the properties was approximately $2.7 million.
According to the indictment, Enders would shop on-line to obtain mortgage financing for all of the twelve properties. On the loan applications for these properties, Enders falsified that the source of the down payments, settlement charges and subordinate finances were to be made by the buyer of these properties, when they were actually made by William E. and William C. McKanry, the sellers of the properties. All closings were made at USA Title, LLC, St. Louis County, and documents falsely showed the buyer as making cash payments that were actually made by the McKanrys.
The indictment states that at the closings, Enders received $226,000 above her commission fees as the mortgage broker to buy Foundation Mortgage, Inc. On the seller’s settlement statement these monies were falsely represented to be construction rehab costs on the particular properties. Money would be going to Paula Enders at the closings as construction rehab on these properties when they actually were to be used to purchase Foundation Mortgage, Inc. Since the closing on the twelve properties at USA Title, 11 out of 12 properties ended up in foreclosure and were resold for $1.2 million for a loss of approximately $1.5 million.
USA Properties, LLC maintained and provided a list of their “for sale” properties to area brokers and real estate agents. The list identified the particular property address and corresponding “retail value” and “sale price.” In order to sell the properties, USA Properties, LLC was willing to sell these properties below the purported appraised value to buyers. This market of favorably priced real estate to which Paula Enders, William C. McKanry and William E. McKanry had access provided an opportunity. By matching USA Properties, LLC with buyers, they exploited the difference between what USA Properties, LLC was willing to take for a property “sale price” and what a prospective investor, induced by special deals, was willing to pay, i.e., the “spread” or “retail value.”
“Mortgage fraud is one of the fastest growing crimes that we face as a nation,” said United States Attorney Catherine L. Hanaway. “This office and our law enforcement partners will vigorously investigate and prosecute mortgage fraud whenever it is discovered.”
“Successfully investigating and prosecuting mortgage fraud is critical due to the effect it has on the economy. Mortgage fraud has had a devastating impact on communities across the United States,” said John V. Gillies, Special Agent in Charge, FBI-St. Louis Division. “The FBI will continue to work with its partners to bring the perpetrators to justice.”
William C. McKanry, St. Albans, Missouri; William E. McKanry, Warrenton, Missouri; and Paula Enders, Florissant, Missouri; were each indicted on multiple charges, including conspiracy to commit bank fraud, wire fraud and mail fraud. The twenty-one count indictment was handed down by a federal grand jury in June 2008, but remained sealed.
If convicted, conspiracy to commit bank fraud carries a maximum penalty of five years in prison and/or fines up to $250,000; each count of mail and wire fraud carries a maximum penalty of twenty years in prison and/or fines up to $1,000,000. Restitution is mandatory.
Hanaway commended the work performed on the case by the Missouri Department of Insurance, the United States Postal Inspection Service, the Federal Bureau of Investigation and First Assistant United States Attorney Michael W. Reap, who is handling the case for the U.S. Attorney’s Office.
The charges set forth in an indictment are merely accusations, and each defendant is presumed innocent until and unless proven guilty.
OK SO LETS SEE IF THE FBI HOUSTON WILL GO AFTER THE FRAUD JERKS IN HARRIS COUNTY TEXAS.A COMPANY IN KANSAS WAS DUMB ENOUGH TO LEND MILLIONS TO A RAT WITHOUT INSPECTING THE COLLATERAL!!! AND GOT A BIG SUPRISE I WILL SEND MRS DOLLAR SOME PICTURES OF PROPERTIES INVOLVED.AFTER THESE THINGS HAPPEN AND THE “BIG” INVESTOR COMES IN THEY EXPECT TO CONTROL THE BOARD OF DIRECTORS AND HAVE THE HOA MONEY DIRECTED TO THEIR REPAIRS. I AM STILL MAD AS HELL!! G.UBER
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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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