Friday, June 20, 2008
4 Indicted In Maryland Mortgage Fraud Scheme
Michael K. Lewis, 56, Cheryl Brooke, 51, both of Upper Marlboro, Maryland, Lewis‘ brother Earnest Lewis, 59, Takoma Park, Maryland and Winston Thomas, 42, New Carrollton, Maryland have been indicted for conspiracy to commit wire fraud and wire fraud in connection with a scheme in which they offered to help financially-vulnerable individuals save their homes from foreclosure, and instead defrauded homeowners and mortgage lenders. The indictment also charges Michael K. Lewis and Brooke with bankruptcy fraud in connection with the scheme. The indictment was returned on June 11, 2008 and unsealed upon the arrest of the defendants.
According to the twelve-count indictment, from the Fall of 2004 until May 2008, Lewis aired television advertisements that targeted financially-vulnerable individuals, representing that he could improve their credit, save their homes from foreclosure and assist them with bankruptcy. Viewers who called the toll-free number were solicited by Michael K. Lewis and others to become MKL Associates and purchase a variety of for-fee services, such as the Michael K. Lewis Financial Diet (the MKL financial diet) for reducing debt, as well as a pre-paid legal plan, income tax return preparation services, and bankruptcy petition preparation.
The indictment alleges that Michael Lewis and the co-conspirators specifically targeted individuals who owned and had equity in their homes, but were facing default or foreclosure on their homes. The defendants fraudulently represented to the homeowners that their “lease/buy-back program” would help the homeowners to keep their homes. The homeowners were told that Earnest Lewis‘ good credit would be used to temporarily refinance their homes, and that they could repurchase the homes in roughly one year, or once they regained their financial footing. The homeowners were induced by the co-conspirators into signing documents related to the sale and lease of their homes. In order to carry out the scheme, Brooke would file bankruptcy documents in the name of the homeowners to delay the foreclosure of the homes. In addition, in order for Earnest Lewis to obtain mortgage loans to purchase the homes, Thomas and Earnest Lewis submitted false financial and employment information to mortgage lenders. After Earnest Lewis obtained financing to purchase the properties, Brooke would file motions to dismiss the homeowners’ bankruptcy cases so that the settlements could take place.
The indictment further alleges that, after the sales of the homes, several homeowners were told that they could remain in their homes by paying “rent” to Earnest Lewis, which was often higher than the homeowner’s mortgage payment had been. The “rent” and other MKL Associate fees were deposited into a bank account belonging to In the House Technologies, a company affiliated with Michael K. Lewis and Cheryl Brooke. In addition, Michael K. Lewis and Thomas, then a senior loan officer at a mortgage company, allegedly prevented homeowners from receiving at settlement the checks that represented the money due from the sales of their homes. Thomas picked up the checks, and the co-conspirators induced the homeowners into signing over the checks to ”In the House Technologies.” When confronted by the homeowners as to why they were getting less money than anticipated from the sales of the homes, Michael K. Lewis allegedly made false and misleading statements to the homeowners, including that the fees and expenses associated with settlements were higher than anticipated and that money would be put into escrow accounts for the homeowners. Instead, the indictment alleges, the defendants distributed the proceeds amongst themselves. Ultimately, the defendants stopped paying the mortgages on the homeowners’ properties, which caused them to go into default.
The indictment seeks forfeiture of $2,915,600, including funds and property contained in accounts in the names of the defendants and entities associated with or controlled by them.
“The mortgage fraud conspiracy cases that we are prosecuting in Maryland should serve both to hold criminals accountable and to warn homeowners about the many smooth-talking con artists who take advantage of people who fall behind on their mortgage payments,” said United States Attorney for the District of Maryland Rod J. Rosenstein. “No matter how bad your financial situation may seem, signing your house over to a con artist will make it worse.”
The defendants all face a maximum sentence of 20 years in prison and a $250,000 fine for the conspiracy and each of the nine mail fraud counts. Michael K. Lewis and Brooke also face a maximum sentence of 5 years in prison and a fine of $250,000 for bankruptcy fraud.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein thanked the U.S. Postal Inspection Service, the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation for their investigative work. Mr. Rosenstein commended Assistant United States Attorneys Gina L. Simms and Stacy Dawson Belf, who are prosecuting the case.
mortgage fraud
There is not enough room in prison to hold all the criminals guilty of mortgage crimes, but they should all be imprisoned nonetheless. They should be made to provide restitution to all the victims and perform some type of community service. They should also be barred from ever attaining any type of employment involving the control of financial matters. Let the arrests continue until all of them are found and prosecuted.
Posted by on 06/20 at 02:50 PM
Done right people can save thier home with similar process. But there are always those that try to scam the innocent. And it puts those companies that offer similar servies in an honest and correct process in a bad light. Throw away the key!
Posted by on 07/10 at 04:59 AM
Post a Comment
The trackback URL for this entry is:
Trackbacks:
|
Some Sources require Registration.
Mortgage Fraud Risk Index Jumps 11 Percent, According to Verisk Analytics Subsidiary Interthinx
CNNMoney.com
The report...indicates that the overall Interthinx Mortgage Fraud Risk Index surged more than 11 percent from the previous quarter...
Mortgage Fraud Case Appears Headed to Jury in Jackson County Circuit Court
The Jackson Citizen Patriot - MLive.com
The prosecution and defense rested Thursday in the mortgage fraud cases against Teresa Marie WIlson and Angelo Surveo Williams.
Wyoming Woman Charged with Mortgage Fraud After Allegedly Stealing Sister's Identity
MLive.com
A Wyoming woman is facing felony charges accusing her of stealing her sister's identity to obtain a mortgage...then defaulting on that mortgage, leaving taxpayers on the hook.
U.S. Attorney Targets White-Collar Crime
Wall Street Journal
In San Francisco, Mr. Russoniello said he is trying to crack down on cases like mortgage fraud, though he doesn't have the budget to hire additional white-collar prosecutors.
Arrests Made in Orlando Mortgage Fraud Roundup
MyFoxOrlando.com
During the real estate boom two years ago, some units were going for a half million dollars. Now some are short selling for just 50 grand.
10 Accused of Mortgage Fraud at PR Coastal Resort
Forbes
A developer and nine other people, including a former salsa singer, have been charged in an alleged $14 million mortgage fraud in Puerto Rico...
Strodtman Jury Selected in Mortgage Fraud Trial
Greeley Tribune
Attorneys will deliver opening statements this morning in the trial of Mark Strodtman, who is accused of bilking homeowners in a mortgage scheme years ago.
FHA Digging Out After Loans Sour
Wall Street Journal
Most banks rejected Ms. DeForte because her debt level was too high and her credit score too low. But Lend America put Ms. DeForte into a $402,000 loan backed by the Federal Housing Administration...
Mortgage Fraud Probe Nets 105 Across State
Bradenton Herald
At least one local man is among 105 people arrested across the state following a nine-month investigation into organized mortgage fraud.
Mortgage Fraud Increases
MortgageRates.co.nz
The number of frauds involving professional advisors, such as accountants and lawyers, has increased from two to four since March 2008.
Previous Articles
|
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.
More Trial Coverage
|
|
|
|
|
|
|
|
|
|
|