Thursday, February 14, 2008
Jury Convicts Mortgage Fraud Ring
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 Khodadad pleaded 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.
mortgage fraud
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.
Posted by on 07/11 at 01:50 AM
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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...
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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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