Thursday, March 30, 2006

First Sentences in $20 Million Missouri Mortgage Fraud

A former mortgage broker and a former real estate appraiser were sentenced in Missouri federal court in separate but related cases involving a property flipping scheme and mortgage fraud. Their fraud was part of a larger scheme that involved nearly 300 fraudulent loans worth almost $20 million.

Avonda Nicodemus, 33, Kansas City, Missouri, a former account executive at Ameriquest Mortgage in Gladstone, Missouri was sentenced to five years of probation, including four months of electronic monitoring, and ordered to pay $1,158,501 in restitution. Under the terms of probation, Nicodemus may not work as a loan broker or in the mortgage business.

Peggy Snodgrass, 40, Independence, Missouri, who operated a real estate appraisal business in Raytown, Missouri, was sentenced to five years of probation and ordered to pay $1,149,188 in restitution.

Nicodemus and Snodgrass are the first defendants sentenced in the mortgage fraud scheme in which six defendants have pleaded guilty. The largest mortgage fraud case ever prosecuted in the Western District of Missouri, the scheme encompassed 289 fraudulent loans totaling $19.6 million, with a total actual loss of approximately $11.8 million for the financial institutions that were defrauded.

Brent Michael Barber, 41, of Belton, Missouri, pleaded guilty on February 23, 2006, to 104 counts contained in two federal indictments. Those indictments, as well as a third federal indictment for which Barber was convicted by a jury, involve separate schemes to defraud mortgage lending companies of millions of dollars.

Barber admitted that he recruited people to purchase rental properties, assuring them that he would find renters for the properties and sell the properties a short time later, so that the victim-investors would have no financial risk and a guaranteed quick profit. Then he provided false information on the loan documents and arranged for inflated appraisals in order to receive approval for the loans. Many of the buyers would not have qualified for the loans if true information had been given to the lenders.

During the first conspiracy, from May through October 1999, Barber was a client of Ameriquest Mortgage. During that period, he conspired with co-defendants Nicodemus, Roderick Neil Criss, 34, Kansas City, Missouri, who was the branch manager, and Cauncey Calvert, 35, Kansas City, Missouri, who was an account executive, to defraud Ameriquest.

As a result of that conspiracy, Ameriquest Mortgage approved 66 fraudulent loans totaling $4 million.

Snodgrass pleaded guilty on February 17, 2005, to her role in that mortgage fraud conspiracy.  Snodgrass admitted that she provided artificially inflated appraisals on properties for which Barber was seeking mortgage loans from Ameriquest, Countrywide Home Loans and Hamilton Mortgage. In return, she received fees and other benefits.

Between June 9, 1999, and November 1, 2000, in response to requests from co-conspirators, Snodgrass prepared 75 false and fraudulent appraisals, inflating the values of the properties, misrepresenting the work she had done to prepare the appraisals, and at times misrepresenting the condition of the properties.  For example, Snodgrass prepared and submitted a fraudulent appraisal for property at 29 E. 32 St., Kansas City, Missouri, for $73,000 in response to a request from a co-conspirator.  Snodgrass stated that she personally inspected the property and that it was in good to average condition with no observable external depreciation. In reality, the house had failed city codes inspections and was on track for demolition based on findings that the building was dangerous and a nuisance, that the foundation and siding were cracked, and that the frame, guard rail, roof, gutters, porch, soffit, and fascia were damaged, decayed, or deteriorated.

mortgage fraud