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imageRachel 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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Monday, October 06, 2008

Father, Son, Broker Indicted In Missouri Scam

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.

 mortgage fraud

   

Posted by Staff Reporter on 10/06/08 at 03:43 AM
Mortgage FraudMissouri • Total comments: (1) (0) Trackbacks
  1. 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

    Posted by  on  10/06  at  06:42 AM

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Today's News

Some Sources require Registration.

 

Mortgage Fraud Risk Index Jumps 11 Percent, According to Verisk Analytics Subsidiary Interthinx
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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

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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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.

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