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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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Keith Garner, 48, Gregg Savage, 24, Shalonda Harris, 36, all of Atlanta, Georgia, and Latesha Garner, 27, Durham, North Carolina, were convicted after a two week jury trial on charges of conspiracy to commit mortgage fraud and wire fraud related to $6 million in fraudulent real estate financing from SunTrust Mortgage Company over a ten week period in the summer of 2006.
According to the indictment and information presented in court, defendant Keith Garner solicited his daughter, Latesha Garner, a loan processor with SunTrust Mortgage, in the spring of 2006 to handle fraudulent loan applications submitted on behalf of straw borrowers recruited by Keith Garner and his coconspirators. Because she was responsible both for verifying borrower employment and asset information as well as for approving closing documentation, Latesha Garner was uniquely positioned to defraud SunTrust Mortgage, which she did by falsely verifying borrower credentials and approving hundreds of thousands of dollars in false payoffs to her father. Keith Garner paid Latesha Garner $33,000—a year’s salary—across four transactions to facilitate his criminal scheme.
Keith Garner also recruited defendant Susan Khodadad, a closing paralegal with several area real estate firms, to ensure that the false payoffs to Garner and his co-conspirators were included in SunTrust Mortgage‘s loan documentation. Defendant Khodadadpleaded guilty to the conspiracy count of the indictment prior to trial and testified against her co-conspirators. Focusing on the ”Country Club of the South” and other high-end developments and subdivisions in the Atlanta, Georgia area, Keith Garner and his co-conspirators acquired numerous properties in the name of their straw borrowers, often without the straw borrower’s consent. Each of the properties was accompanied by an inflated appraisal, which, in addition to the submission of false loan applications, enabled the defendants to secure real estate financing from SunTrust Mortgage in excess of the fair market value of the properties. The defendants then stole the spread between the inflated and fair market value of the properties primarily through defendants Latesha Garner and Khodadad, who ensured that SunTrust Mortgage either directly paid a bogus seller’s obligation or was never made aware that a substantial portion of seller’s proceeds was being paid to the defendants outside of closing pursuant to a criminal agreement with the seller.
Defendant Gregg Savage was convicted of realizing more than $830,000 in false profits in just seven days as a seller of two properties, from which he paid Keith Garner $200,000 for supplying the straw buyers. Defendant Shalonda Harris, a licensed realtor, was convicted of receiving $66,000 from defendants Keith Garner and Savage related to her role in locating properties and straw buyers on two indicted transactions.
“The defendants’ sheer greed is demonstrated by the fact that they obtained $6 million in fraudulent mortgage loans from a single lender in just ten weeks,” said United States Attorney David E. Nahmias. “They were indicted several months after SunTrust Mortgage discovered their scheme, however, and, following a two-week trial, the jury convicted each defendant after only five hours of deliberation. Those who intend to commit mortgage fraud should remain on notice that law enforcement may be looking over their shoulders, and those who have committed mortgage fraud are once again reminded that juries in this district will not tolerate their criminal conduct.”
Each defendant faces a 20 year prison term and $250,000 fine on the conspiracy count of the indictment and a separate 20 year prison term and $250,000 fine on each of their wire
fraud convictions. A sentencing date has not yet been scheduled before United States District Judge Richard W. Story.
I think we are gonna find alot more of these cases out there and during a boom when things are busy wrong doers step in and break the law.
Posted by on 02/14 at 09:35 AM
Thats a ton of money but if I read that correctly, they are getting at least 40 yrs in prison just for theft. Its not like they killed someone.
Posted by on 02/17 at 04:44 AM
Did they rape or murder someone? 40 years? 4 years is too much. Its amazing how we dont put this much effort into catching killers and molestors.
Posted by on 04/26 at 02:06 PM
Susan Khododad sentenced to 30 months and $1.2 mil in restitution. Stiff sentence for someone who made only about $20k from the scam.
Posted by on 06/23 at 04:52 PM
i think that is a ridiculous sentence just for taking money. but people who rape or kill someone gets 10 years and probation! the justice system has gone blind or they’re just too dumb to see the real criminals!!!
Posted by on 07/01 at 03:27 PM
A crime is a crime. It might be a stiff sentence if she were truly “recruited” or “talked into” taking part in this scam, but I really don’t believe that is the case. It is my opinion that she was predisposed to this sort of behavior and was looking for something like this for years. She is not a victim of the Justice System. She is a victim of her own behavior, greed and lack of integrity. She deserved what she got.
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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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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