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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Husband and Wife Sentenced in Multi-Million Dollar Fraud Scheme
Darrell Underwood, 43, and Cynthia Underwood, 41, both of Chesterfield, Virginia, were sentenced for their roles in a multi-million dollar fraud scheme. Both previously pled guilty to Conspiracy to Commit Mail Fraud, in violation of 18 U.S.C. § 371. Darrell Underwood also pled guilty to Engaging in Unlawful Monetary Transactions, in violation of 18 U.S.C. § 1957(a). Chief United States District Judge James R. Spencer sentenced Darrell Underwood to 120 months' imprisonment and Cynthia Underwood to 36 months' imprisonment. Each defendant's prison sentence will be followed by a term of 3 years Supervised Release. Although the preliminary loss figure is approximately $9,000,000, the United States is still conducting an investigation to determine the final amount of restitution. Judge Spencer scheduled a final restitution hearing on the case for December 15, 2009, at 9:15 a.m.
According to court records, Darrell and Cynthia Underwood owned and operated Walkwood Properties, Midlothian, Virginia. Walkwood Properties was a real estate company that offered various home owners an opportunity to save their homes from foreclosure. Through that company, the Underwoods also offered an investment program to various individuals, allowing them to invest in Walkwood's real estate purchases. In connection with their guilty pleas, the Underwoods admitted to operating a "Ponzi" scheme through Walkwood's investment program in 2007. The essence of the "Ponzi" scheme was that the Underwoods induced individuals to invest money with Walkwood Properties by representing that investors' funds would be funneled directly into investment properties targeted by Walkwood's foreclosure efforts. In exchange, the Underwoods promised that the investors would receive returns of up to 50% within 60-120 days, depending on the timing of the investments as the scheme progressed. In 2007, the Underwoods paid their investors a rate of return, but this was rarely taken from the profits of investments. Instead, the funds used to repay investors were derived from monies paid by subsequent investors, or groups of investors.
As a result of the Underwoods' ongoing Ponzi scheme, the victim investors incurred significant losses. From April through December 2007, the Underwoods received approximately $18,400,000 in investor funds. Of that amount, the bank records established that only $2,100,000 was actually paid towards any type of real estate transaction. During the same time frame, the Underwoods paid approximately $16,200,000 to investors; of that amount, approximately $13,400,000 was derived from investor funds that were simply used to repay other investors. As of December 13, 2007 (the date of seizure of the investment accounts in connection with the investigation), the Underwood's investor account had a balance of $780,557.07. As of that same day, the Underwood's investment program had an outstanding balance of over $14,000,000 owed to various investors. That amount was comprised of over $9,000,000 in principle alone. The final restitution amount for victims will be determined at the December 15, 2009 restitution hearing.
Walkwood Properties is connected to another case styled United States v. Colin C. Connelly, Case No. 3:08CR466. In connection with a guilty plea entered on December 2, 2008, Connelly admitted to conspiring with representatives from Walkwood Properties to skim equity in housing transactions by making false entries on HUD-1 Settlement Statements. On March 10, 2009, Judge Spencer sentenced Connelly to 24 months imprisonment and ordered him to pay $376,464.62 in restitution.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, announced the sentences.
The investigation was conducted by the Internal Revenue Service, the Department of Housing and Urban Development Office of Inspector General, the United States Postal Inspection Service, the Federal Bureau of Investigation, and the United States Secret Service. Assistant United States Attorneys Michael Gill and John Adams prosecuted the case for the United States.
Failed Mortgage Firm Trustee Allowed $50,000 in Fees Union Leader
U.S. Bankruptcy Court Judge J. Michael Deasy will approve $50,000 in legal fees for the trustee of failed mortgage brokerage businesses Financial Resources Mortgage Inc. and CL&M Inc.
Bend Oregon Event to Help Homeowners Prevent Foreclosures Oregon.Gov
As part of an ongoing effort to help homeowners avoid foreclosure, state agencies are organizing a foreclosure-prevention event in Bend on Saturday, March 27, 2010.
Shelbyville Man Gets 2-Year Sentence For Loan Fraud Chattanoogan.Com
Prosecutor Gary Humble said the lost was approximately $2.3 million in the mortgage fraud involving hundreds of homes in the Shelbyville area.
Lend America, VP Ashley Banned from FHA Housing Wire
Michael Ashley, the embattled former vice president of Federal Housing Administration (FHA)-backed mortgage originator Lend America, and the company he worked for, were permanently banned from doing business in the industry last week.
Countrywide Tries to Pin Blame on Insurer Court House News
Countrywide Home Loans demands $111 million from Triad Guaranty Insurance, claiming Triad is trying to blame mortgage lenders for the insurer's role in the housing bubble and collapse.
Investors Say They Were Swindled in Property Scheme Fox 13 Now
Utah Division of Consumer Protection is joining forces with a few investors who claim they have been cheated by an agency called "Utah Mini Ranches.
Greenfield Man Accused of Housing Scam The Republic
A former real estate agent conned at least eight people by renting them properties actually owned by a federal agency and then running off with their deposits, prosecutors said.
Appraisal Institute Opposes Obama Administration's Plan for Homeowner 'Short Sales' PR News Wire
Citing concerns about increased mortgage fraud, four organizations representing more than 35,000 real estate appraisers today voiced their opposition to changes to an Obama administration program that will encourage "short sales" of homes.
Ownership Rights to Get Another Look TBO.Com
State lawmakers may beef up protections of property owners' rights by rewriting a law this spring that is at the center of a case of alleged fraud in Pasco County.
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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