Tuesday, June 19, 2007
Mississippi Man Charged in House-Flipping Scam
Michael O’Keefe, Jr., 47, Poplarville, Mississippi, formerly of New Orleans, has been charged in a five count indictment in connection with an on-going federal investigation into a house-flipping scam at Citywide Mortgage. O’Keefe is the son of former Louisiana state Senate President Michael O’Keefe who was convicted in 1999 of conspiracy, mail fraud, wire fraud and money laundering after skimming millions of dollars from a failed medical malpractice insurance company.
The indictment alleges a flipping scheme that involved fraudulent FHA loan applications at Citywide and the role O’Keefe, Jr., had in that scheme. It is alleged that O’Keefe, Jr., assisted his underwriter in compiling and approving fraudulent loan applications through the use of a “ghost” employee. The fraudulent loan applications included false tax information, false credit and employment information and an inflated real estate appraisal. The underwriter at Citywide approved the loans and applied for HUD insurance for the loans. Based on the fraudulent applications, HUD insured the loans. Citywide then sold the loans to another mortgage company. Various properties eventually went into default and HUD became responsible for paying off those loans.
The indictment further alleges that O’Keefe, Jr. engaged in various financial transactions with monies derived from the criminal scheme. Specifically, it is alleged that he used these criminally-derived proceeds to pay off delinquent mortgages that had been originated by Citywide . The indictment charges that O’Keefe, Jr. arranged for the purchase of cashier’s checks used in the transactions.
O’Keefe, Jr., is the seventh person charged in the on-going investigation. Five other persons have also been charged and have entered pleas of guilty. Earlier, Michelle Cochrane, a former underwriter at Citywide , pled guilty to charges that she conspired with others while employed at Citywide to make false statements to HUD in order to obtain HUD mortgage insurance for numerous fraudulent loans. Additionally, Robert Green pled guilty to charges that he prepared false tax returns which were used in support of various fraudulent loan applications. Three straw buyers, Timothy Falls, Dennis Addison and Dennis Leblanc, have pled guilty to charges that they acted as straw buyers. Calvin Davis, remains charged with Conspiracy to Commit Mail Fraud, Making a False Statement in a HUD Transaction and Income Tax Evasion for his role in the scheme.
Count One of the indictment charges O’Keefe, Jr., with Conspiracy to Defraud the United States. The range of punishment for this offense is a term up to five years imprisonment, and a fine of $250,000. Count Two charges O’Keefe, Jr., with Conspiracy to Commit Money Laundering. Counts Three, Four and Five charge the defendant with Engaging in Monetary Transactions in Property Derived From Specified Unlawful Activity. The range of punishment for Counts Two, Three, Four and Five is 10 years imprisonment per count and a fine of $250,000. Restitution can be ordered by the sentencing court.
mortgage fraud
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Rachel Dollar is an attorney and Certified Mortgage Banker who handles fraud recovery litigation for lenders and secondary market investors nationwide. She is a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is licensed to practice law in California and maintains offices in Santa Rosa, California. 
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