Thursday, June 12, 2008

Husband And Wife Plead Guilty To Identity Theft And Mortgage Fraud

Tyrone L. Davis , 40, and Stephanie E. Davis, 49, both of St. Joseph, Missouri, pleaded guilty before U.S. District Judge Dean Whipple to the charges contained in an October 3, 2007, federal indictment. The Davises are co-owners of Davis Custom Homes in St. Joseph, Missouri. Stephanie Davis also worked as a loan originator for Gateway Mortgage Group, LLC (formerly known as American Home Lending).

By pleading guilty, Tyrone Davis admitted that, from March 1 to November 1, 2006, he participated in a conspiracy to defraud banks and mortgage lenders by receiving fraudulent loans. Conspirators prepared and submitted fraudulent bank loan or mortgage loan applications containing false information and forged signatures in order to receive bank or mortgage loans. In order to carry out this scheme, conspirators stole the identities of two persons and used false identities and fraudulent supporting documents to apply for loans to purchase residential properties.

Stephanie Davis pleaded guilty to the interstate transportation of stolen property, related to the wire transfer of $166,000 obtained through mortgage fraud.

A federal investigation was initiated in August 2006, when the Missouri Department of Health and Senior Services office in St. Joseph received a report that a 73-year-old woman was the victim of identity theft and her personal information was being used to make fraudulent purchases of real estate properties in the St. Joseph, Missouri area. The victim never gave permission for her signature to be used in connection with the fraudulent purchase of any real estate, and she believed her granddaughter, Tina Mooney, 32, St. Joseph, Missouri, deceived her into signing a fraudulent power of attorney document. Mooney, in a separate but related case, pleaded guilty on December 13, 2007, to the interstate transportation of stolen property and admitted to her role in the fraud scheme.

At the time the power of attorney was created, Mooney was residing in a house owned by the Davises. In May 2006, Mooney was about to be evicted for failure to pay her rent. Stephanie Davis convinced her that she could purchase up to 10 properties (many owned by the Davises) and become a landlord, if she could find someone with a good credit rating. Mooney provided the name of her grandmother and helped to create a false power of attorney document in her grandmother’s name.

Starting in June 2006, Mooney, with the assistance of Stephanie Davis, utilized the power of attorney document to sign a number of real estate contracts in her grandmother’s name. Mooney (with the help of Stephanie Davis) also created false income and employment records in the victim’s name. Initially, they attempted to obtain financing in the victim’s name and did not try to hide her actual address or income figures. However, when it became apparent they would not be able to obtain financing with the victim’s actual information, they created false bank records in the victim’s name.

Tyrone Davis admitted that he directly contributed to the mortgage fraud conspiracy by assisting in the creation and submission of a fraudulent $41,500 home repair invoice for a house owned by himself and his wife, as part of a mortgage loan application, on August 23, 2006. Although the invoiced home repairs were never completed, the Davis home was fraudulently sold with mortgage funds accruing to the Davises incorporating the $41,500 of inflated or misrepresented repair costs.

Co-defendant Scott E. Schneider, Sr., 51, St. Joseph, Missouri, pleaded guilty on January 24, 2008, to his role in the conspiracy. Schneider assisted co-conspirators to create fraudulent documents and transported others to various businesses for the purpose of executing or attempting to execute the mortgage fraud scheme.

Under federal statutes, Tyrone Davis could be subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000. Stephanie Davis could be subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $250,000. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney K. Michael Warner. It was investigated by the Federal Bureau of Investigation and the Mo. Department of Health and Senior Services, Special Investigations.

mortgage fraud