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

1. 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

2. 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

3. 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

4. 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

5. 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

6. 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