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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 Smith Dollar, PC, is licensed to practice law in California and maintains offices in Santa Rosa, California. Email Ms. Dollar
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Dustin Ray Sherwood, 36, Trimble, Missouri, who had a large farming operation in Buchanan and Clinton counties was indicted by a federal grand for bank fraud, making false statements to obtain loans, selling some of the crops that were supposed to secure loans, and obstruction of justice, which is related to the bankruptcy proceedings in which his farm property was sold. The eight-count superseding indictment replaces an August 19, 2008, federal indictment that charged Sherwood with the single obstruction of justice count. Sherwood remains in federal custody.
According to the indictment, Sherwood and his spouse, Jennifer Sherwood, filed a Chapter 11 bankruptcy case on Sept. 25, 2007. The primary asset of the bankruptcy estate was a large farming operation. During the course of the bankruptcy, the indictment alleges, they fired their bankruptcy counsel, repeatedly violated bankruptcy court orders, and refused to cooperate with their creditors. Creditors filed a joint emergency motion to appoint a trustee, which the bankruptcy court granted on February 14, 2008.
The Sherwoods did not submit a viable plan of reorganization, the indictment says, and interest and attorneys’ fees on their massive debts were increasing at an alarming rate. The trustee sought permission to sell the farm equipment and real estate, and the court approved auction procedures to sell those assets. The farm equipment was sold at auction in April 2008 and the real estate holdings and residence were scheduled to be sold in August 2008.
Prior to the real estate auction, the indictment says, Sherwood filed a Notice of Lis Pendens on his property, which the court ordered him to remove. Sherwood allegedly told an employee of the trustee’s office that he would shoot anyone who came upon his property, and warned the auctioneer not to enter the property.
A federal criminal complaint was filed against Sherwood, and on July 30, 2008, he was ordered to be detained without bond. Sherwood’s property was sold at auction on August 5, 2008, for $3.89 million.
The indictment also charges Sherwood with two counts of bank fraud related to a $605,250 loan from Citizens Bank & Trust Company and a $250,000 loan from LibertyFirst Bank (now known as Patriots Bank). In order to be approved for those loans, the indictment alleges, Sherwood falsely represented that his 2005 federal income tax return had been filed with the IRS, when in fact, he had not filed a 2005 federal tax return. Sherwood allegedly represented to both banks that the sum of $99,716 had been paid in full, when in fact no such payment had been made.
Sherwood is also charged with two counts of making false statements related to loans he received from the Commodity Credit Corporation, a federal corporation with the U.S. Department of Agriculture that lends money to persons using their stored grain as collateral. Sherwood allegedly claimed that he had 226,420 bushels of stored corn when he applied for a loan on Dec. 28, 2006, and was advanced $434,726 with that corn pledged as collateral. Although Sherwood did have that amount of stored corn on hand when it was measured in early November, he had sold 20,164 bushels of corn for which he was paid $71,518. Sherwood also allegedly claimed that he had 59,000 bushels of stored soybeans when he applied for a loan on Dec. 28, 2006, and was advanced $298,890 with those soybeans pledged as collateral. However, the indictment alleges that Sherwood did not own approximately 31,000 of the 59,000 bushels he claimed to have on hand.
Sherwood is charged with three counts of converting to his own use property that was pledged to the Commodity Credit Corporation. The indictment alleges that, on three separate occasions, Sherwood sold grain that had been pledged to secure Commodity loans, without the Commodity Credit Corporation’s authorization and without applying any of the proceeds from those sales toward his Commodity loans. Sherwood allegedly received a total of $168,219 from those sales.
Charges contained in the indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorney Jane Pansing Brown. It was investigated by the U.S. Department of Agriculture and the Federal Bureau of Investigation.
Failed Mortgage Firm Trustee Allowed $50,000 in Fees Union Leader
U.S. Bankruptcy Court Judge J. Michael Deasy will approve $50,000 in legal fees for the trustee of failed mortgage brokerage businesses Financial Resources Mortgage Inc. and CL&M Inc.
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Countrywide Tries to Pin Blame on Insurer Court House News
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Utah Division of Consumer Protection is joining forces with a few investors who claim they have been cheated by an agency called "Utah Mini Ranches.
Greenfield Man Accused of Housing Scam The Republic
A former real estate agent conned at least eight people by renting them properties actually owned by a federal agency and then running off with their deposits, prosecutors said.
Appraisal Institute Opposes Obama Administration's Plan for Homeowner 'Short Sales' PR News Wire
Citing concerns about increased mortgage fraud, four organizations representing more than 35,000 real estate appraisers today voiced their opposition to changes to an Obama administration program that will encourage "short sales" of homes.
Ownership Rights to Get Another Look TBO.Com
State lawmakers may beef up protections of property owners' rights by rewriting a law this spring that is at the center of a case of alleged fraud in Pasco County.
Thursday, February 18, 2010 F. Jeffrey Miller Trial Continued Testimony
As reported by Anne Mitchell, who viewed the trial:
Angela Parenza worked for Jeff Miller as the office manager for 7 or 8 years beginning in 1998. Parenza was indicted along with Miller and pled guilty to conspiracy to commit bank fraud and money laundering. Parenza testified that Miller or his contractors allegedly preferred to build all the...
Wednesday, February 10, 2010 F. Jeffrey Miller Trial Coverage Continued - Witness Testimony
Steve Middleton Testimony - Coverage Provided by Anne Mitchell
The Government continued in its cross examination of Steve Middleton. He was shown several HUD-1 statements involving sales of homes located in Overland Park, KS, and Olathe, KS. The HUD statements each allegedly showed line items of payments to (James) Moser & Associates, LLC's...
Monday, February 01, 2010 F. Jeffrey Miller Trial Coverage - Continued Witness Examination
According to Anne Mitchell, who is present in court for the trial:
Next Witness: Kelly Sanford
Kelly Sanford of the Federal Reserve was a short witness for the Government. Sanford manages electronic payments between banks and member financial institutions. He was shown copies of wire transfers and asked whether they coincided with the counts in...
Wednesday, January 27, 2010 F. Jeffrey Miller Trial - Prosecution Witnesses Continued
According to Anne Mitchell, who is viewing the trial:
January 13, 2010
Witness: Rick Hayes
Rick Hayes testified that on the day that he closed on his Miller Enterprise home, he received a phone call from the Kansas Banking Commission informing him that his loan was fraudulent. After the Hayes responded to a classified ad, they met with John...
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The information and notices contained on Mortgage Fraud Blog are intended to summarize recent developments in mortgage fraud cases and mortgage banking matters nationwide. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about mortgage banking, mortgage fraud matters or who believe they require legal counsel should seek the advice of an attorney. The creators, editors and sponsors of Mortgage Fraud Blog do not intend to create a confidential relationship or an attorney-client relationship by communication via or arising from this site.
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 
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