Wednesday, September 17, 2008
Loan Officer Sentenced For $16M Mortgage Fraud Scheme
Monty J. Kinman, 27, Overland Park, Kansas, was sentenced by U.S. Chief District Judge Fernando J. Gaitan to two years and six months in federal prison without parole. The court also ordered Kinman to pay a $2,500 fine.
Kinman was convicted at trial on November 7, 2007, for the mortgage fraud conspiracy as well as one count of wire fraud related to the attempted sale of a residential property at 5034 Sunset Drive, Kansas City, Missouri, at an inflated price. Conspirators falsely represented to Fieldstone Mortgage that the sale price was $1.2 million, while in reality, the actual sale price was $707,000. Conspirators sought to obtain a loan to purchase the property through a fraudulent loan application and other fraudulent documents.
Kinman, formerly the regional manager and a loan officer at Soldi Financial in Overland Park, is the sixth co-defendant sentenced in the mortgage fraud scheme.
Raymond Walter Zwego, Jr., 61, Kansas City, Missouri, pleaded guilty on October 19, 2007, to being the organizer and leader of the mortgage fraud scheme and awaits sentencing. Zwego owned and operated Xpress Car Sales, Xpress Car Rental, North Mission Investments, Cobalt Blue, LLC, and Indigo Blue in North Kansas City. Zwego also pleaded guilty to 11 counts of wire fraud related to sending, or causing to be sent, fraudulent documents in a series of facsimiles and an e-mail in furtherance of the conspiracy.
Zwego’s fraudulent real estate closings included 56 properties with loans totaling approximately $15.8 million. Each of these loans were structured in such a way that Zwego received excess funds from the loan closings as a result of inflated appraisals and numerous false and fraudulent documents, as well as misrepresentations to multiple people and entities. These loans were financed by mortgages from 25 lenders, who sustained losses totaling approximately $6.2 million as a result of the fraud scheme.
As previously reported by Mortgage Fraud Blog, seven co-defendants have pleaded guilty and two were convicted at trial.
Rick A. Peterson, 34, Lenexa, Kansas, was sentenced to five years in federal prison without parole. The court also ordered Peterson to pay a $2,500 fine. Peterson was convicted at trial on Nov. 7, 2007, for his role in the mortgage fraud conspiracy and for wire fraud. Peterson was a title insurance officer and loan closer from January 2004 through January 2007, first at Parkway Title in Overland Park, Kansas, then at Freedom Title in Kansas City, Missouri, where he was the manager of the office.
James R. Rhoades, 48, Kansas City, Missouri, was sentenced to five years of probation and ordered to pay a $2,000 fine and $5,395,843 in restitution. Jeremy A. Plagman, 30, Lee’s Summit, Missouri, formerly an appraiser doing business as JET Appraisals in Lee’s Summit, was sentenced to two years of probation, including 30 days of home detention under electronic monitoring. As a condition of his probation, Plagman may not be involved in the real estate industry. Larry E. Barshaw, 57, and Linda M. Thompson-Barshaw, 59, of Kansas City, Kansas, were each sentenced to five years of probation, including six months of home detention. The court also ordered each of these three co-defendants to pay a $2,000 fine, and ordered the Barshaws to pay $1,517,108 in restitution.
The Barshaws were recruited as “straw buyers,” posing as purchasers of the Sunset Drive property. In reality, the Barshaws never intended to reside at the residence or to make payments on the mortgage. They were to be paid $40,000 for their role in the conspiracy. Thompson-Barshaw is ! the owner of Colormarc, Inc., a remodeling business that employs her husband, Larry Barshaw.
James E. Coleman, 60, Kansas City, Missouri, pleaded guilty on May 21, 2007, to his role in the mortgage fraud conspiracy and to wire fraud, and awaits sentencing. Coleman, a Certified Public Accountant who formerly served as president of the board of a Kansas City magnet school, also pleaded guilty to four counts of wire fraud.
Michael Rodd, 54, Olathe, Kansas, pleaded guilty on June 27, 2007, to his role in the mortgage fraud conspiracy. Rodd was a real estate broker doing business as Heartland of America, Inc., in Olathe, Kansas. Rodd is currently a fugitive and a federal warrant has been issued for his arrest.
This case is being prosecuted by Assistant U.S. Attorneys Linda Parker Marshall and Gene Porter. It was investigated by the Federal Bureau of Investigation.
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The number of frauds involving professional advisors, such as accountants and lawyers, has increased from two to four since March 2008.
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
F. Jeffrey Miller Update - October 20, 2009
A hearing was held in Topeka, Kansas in front of Judge Julie Robinson. Miller is currently being held pending his sentencing which is set for December 22nd, 2009 at 9:00 a.m.. Steve Vanatta and Hallie Irvin, Miller's codefendants, will be sentenced at that time also.
Several motions were heard this week. One was a motion for Miller to be released pending his sentencing. Miller's attorney, Jeff Morris, argued that the court had dismmissed with predjudice the matter involving Miller's purchase of a commercial lawnmower, violating the court ordered monitoring agreement. He also argued that Miller was not a flight risk and should be released. This motion was denied.
Another motion heard by Judge Robinson was that of an escrow account containing proceeds from the sale of Miller's forfeited assets. This account has a balance of $143,000. Attorney Morris argued that his firm was due $100,000 for work done in the Miller matter, to date. The government argued that his 'un-itemized fees' were 'exhorbitant'. The balance of the funds, Morris argued, should be released to the Miller family to help pay for mounting household expenses.
The government argued that the 'Asset Forfeiture Provision' applies down to 'the last penny' and that 'the rights of the victims to made whole are of paramount immportance' and that no routine household expenses like Visa bills, are allowed.
Attorney Morris argues that there is more than enough assets to satisfy the jury's judgement of $2.65 million dollars. The government argues that the estimated value of his assets are only $1.4 million.
The government also stated that Miller has been paid dividends from a company Miller has an ownership interest in; Boreflex. From July, 2008 to present, Miller has been paid $330,509.30 from Boreflex, unbeknownst to the court appointed monitor.
Present in the courtroom was Todd Earnshaw. Earnshaw was indicted along with Miller and others in what is commonly referred to as 'Miller I'. That trial is scheduled to begin on January 11, 2010 in Topeka, Kansas.
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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 
