imageRachel Dollar is an attorney and Certified Mortgage Banker who handles fraud recovery litigation for lenders and secondary market investors nationwide. She is a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is licensed to practice law in California and maintains offices in Santa Rosa, California. Email Ms. Dollar

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Feds Get Tough on Mortgage Fraud

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Recent Posts

- Mortgage Fraud Scheme Leads to 83 Count Indictment
- Beazer Homes Settles Accusations of Mortgage and Accounting Fraud
- Closing Agent Indicted for Misappropriating Funds
- Falsified Loan Apps Lead to Criminal Charges
- 4 Indicted For Using Stolen Identities to Obtain Loans
- New Jersey Man Indicted for Mortgage Loan Misreps
- Florida Man Sentenced for Role in $30 Million Mortgage Fraud Scheme
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- Loan Mod Company Ordered to Cease & Desist
- Former Mortgage Broker Pleads Guilty in $1.6 Million Mortgage Fraud Scheme

Friday, March 28, 2008

Jury Convicts In Rebate Coupon Scheme

Terry Hugh Mahon, 69, Broken Arrow, Oklahoma, was convicted by a federal jury in connection with a fraudulent investment scheme involving rebate coupons and home mortgages.  His co-defendant, Grover Harold Phillips, 70, Stillwater, Oklahoma, pled guilty to conspiracy and money laundering in connection with this scheme.

On November 14, 2007, a federal grand jury indicted Mahon and a co-defendant, Grover Harold Phillips, on charges of conspiracy, mail fraud, and money laundering.  Phillips operated through a Nevada business trust called Amsterdam Fidelity Business Trust; Amsterdam’s offices were at Phillips’s home in Stillwater, Oklahoma.  Mahon operated through a Nevada corporation called Rebates International, Inc.; the offices of Rebates International were in Hollister, Missouri.

From 2000 to 2003, Phillips and Mahon worked with other people, including Emzie Huletty of Oklahoma City, to sell cashback rebate coupons that would supposedly allow purchasers to pay off their home mortgages in five years.  The evidence at trial proved that Mahon and the other conspirators made false representations that if victims paid 17% of the value of their homes to conspirators, they would receive rebate coupons worth the entire value of their homes.  The money that they paid was to be invested in high-yield trading programs that conspirators claimed could generate approximately 60% interest per year.  At the end of five years, the victims could supposedly redeem these rebate coupons for face value and pay off their mortgages.  Many victims re-financed their homes, oftentimes on very unfavorable terms, in order generate the 17% required to participate in the program. 

The jury heard more than two days of testimony, including evidence offered by victims who took out mortgages so that they could pay tens of thousands of dollars into the program.  The evidence demonstrated that the only investment in anything resembling a high-yield trading program was a $50,000 payment in April of 2002 to OsGold, a massive Ponzi scheme that folded in the wake of a federal investigation.  The jury also heard evidence that Mahon and other conspirators siphoned off hundreds of thousands of dollars that were supposedly to be invested for the benefit of coupon holders. 

After deliberating just over an hour, the jury convicted Mahon on all four counts in which he was charged.  These included conspiracy to commit mail fraud, using a commercial interstate carrier to commit fraud, engaging in a financial transaction over $10,000 in criminally derived proceeds, and engaging in a financial transaction designed to conceal the nature of the funds involved.  As a result of these convictions, Mahon could be sentenced to twenty years in prison on the conspiracy, fraud, and concealment counts and ten years in prison for engaging in a transaction over $10,000 in criminal proceeds.  He also faces a forfeiture judgment in the amount of $1,061,294.85 and fines of more than $1,000,000.  Federal law will also require Mahon to pay restitution to the victims of his offenses.

After the jury returned its verdict, U.S. District Court Judge Stephen P. Friot determined that Mahon should be detained pending sentencing.  He was immediately placed in the custody of the U.S. Marshal’s Service.  Sentencing will take place in approximately ninety days.

Phillips did not stand trial.  On Friday, March 21, 2008, he entered pleas of guilty to conspiracy and engaging in a financial transaction involving more than $10,000 in criminally derived property.  His sentencing will also take place in approximately ninety days.

Emzie Huletty, who operated EASE Corporation, Vision Services, Inc., and Sunset Financial Group, all located in Oklahoma City, pled guilty to mortgage fraud on March 24, 2006, and is currently incarcerated in federal prison.

“These defendants, aided by others, concocted a scheme whereby they falsely promised buyers and homeowners that if they took out a new mortgage or refinanced their existing mortgage, they could pay it off in just five years with one catch – they had to buy a bogus cashback rebate coupon,” stated United States Attorney John C. Richter.  “This coupon promised financial freedom but delivered financial misery.  I want to commend the FBI and IRS Criminal Investigative Division for their fine work in making sure these con-artists were held accountable.”

   

Posted by Staff Reporter on 03/28/08 at 05:57 AM
Mortgage FraudOklahoma • Total comments: (2) (0) Trackbacks
  1. This case has made me laugh each time I’ve heard about it. Do you really believe that something like this is possible? I mean, for Chris sake, she’s 69 and he’s 70. Let’s be real..

    Posted by  on  10/30  at  10:18 PM
  2. Why was Denver Large, the third partner in this so called scheme never arrested and brought to trial? Why was Mr. Mahon who was supposedly represented by a public defender (due to the fact that he could not afford to hire an outside attorney), not allowed to testify in his own behalf during this trial. Wonder why he didn’t hire a tip top attorney with all that money he supposedly stole. Wonder why Mahon was sentenced to 13 years, Emzie Hueletty who was the one involved with mortgages sentenced to 2 to 3 years, Phillips still free, and Large allowed to walk away. I believe Mahon was the scapegoat to some good recognition for the investigators.

    Posted by  on  11/29  at  09:38 PM

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mortgage fraud news



Today's News

Some Sources require Registration.

 

Erie Area Mortgage Broker Gets Prison in Fraud Case
GoErie.com - Erie, PA
Shortly before receiving a nearly three-year federal prison sentence, former mortgage office manager Francis R. Conti told the judge he never meant to defraud any of the homeowners caught up in a widespread local mortgage-fraud scheme.

Three Former Portland-Area Mortgage Brokers Face Fraud Charges
OregonLive.com - Portland, OR
Joel D. Surprenant, Michael Duc Han and Benjamin Lucian Lucescu all were charged with one count of obtaining mortgage loans through materially false and fraudulent pretenses.

Shaker Pair Pleads Guilty to Mortgage Fraud Charges
Cleveland.com - Cleveland, OH
Two Shaker Heights residents recently pleaded guilty to charges involving a mortgage scheme with seven area houses and $3 million in fraudulent loans.

Feds File Charges in Five Mortgage Fraud Cases
Chicago Breaking News - Tribune - Chicago, IL
Federal charges were filed today against 37 people and four companies in five separate mortgage fraud cases.

Feds Fighting Back
Contra Costa Times - Walnut Creek, CA
Mortgage fraud has increased so dramatically in the San Joaquin Valley that a task force of federal, state and local agencies has been formed to fight back.

Private Investigator Sees Rise in Mortgage Fraud Due to Economy
PR Web - Ferndale, WA
In the past 12 months his firm has been retained to conduct over 300 mortgage fraud investigations, a 100% increase from 2007.

Former UGA, NFL Football Player Arthur Marshall Charged With Mortgage Fraud Claims
WJBF-TV - Augusta, GA
He is also accused of defrauding three banks in obtaining loans for seven different properties in Columbia and Richmond Counties.

Cuomo Subpoenas Loan Modification Companies
New York Times - United States
“The entire industry is a scam, in my opinion,” Mr. Cuomo said Tuesday. “These are services that homeowners don’t need to pay for in the first place.”

Defendant Pleads Guilty to Wire Fraud Relating to Mortgage Fraud Scheme
Imperial Valley News - Holtville, CA
Scavitti admitted that between 2003 and August 2008 he unlawfully diverted mortgage funds that were wire transferred into his client office account to his own personal benefit, resulting in losses in excess of $2.5 million.

Fed Drug Report: Double Trouble for Metro Chicago
ABC7Chicago.com - IL
...Chicago street gang members run a network of legitimate businesses and have engineered mortgage fraud schemes, both to launder drug proceeds...

Previous Articles

TRIAL COVERAGE

Trial coverage provided by Anne Mitchell, Crazy Fish Realty.

Update - US v. F. Jeffrey Miller, et al.

Miller II: Judge Julie Robinson has ruled in favor of the defense motion granting a continuance for sentencing of the 3 convicted defendants: F. Jeffrey Miller, Steve Vanatta and Hallie Irvin. The three will now be sentenced after ruling on post trial motions set for August 10, 2009.

Vanatta has been in custody for over 2 years.  Vanetta filed a motion for his release pending sentencing. That motion was denied.

Miller remains free pending his sentencing. He has hired a new attorney who filed a motion to delay Miller's sentencing. In one post trial motion, the defense argues as to what assets are subject to seizure.

Defendant Todd Earnshaw is a Kansas City real estate Broker (and brother in law of Miller). Earnshaw has been indicted in what is commonly referred to as Miller I. A trial date for that matter has been set for January, 2010 in Topeka, Kansas.

The Government filed a motion to revoke Earnshaw's bond and remand him to custody while he awaits trial after learning that he allegedly committed the state crimes of Driving Under the Influence, Handicap Parking Violation and Failure to Control Speed to Avoid a Collision while on pretrial release. Notwithstanding finding that probable cause existed to believe that Earnshaw committed the aforementioned state crimes, Judge Robinson denied the motion, but ordered several strict conditions that Earnshaw must follow pending his trial.



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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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