Mortgage Fraud Blog is the premier website for news and information on mortgage fraud and real estate fraud throughout the United States.
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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Organizer Of Massive Mortgage Fraud Scheme Sentenced
Phillip E. Hill, 51, Sumatra, Florida, was sentenced to serve 28 years in prison for perpetrating a massive mortgage fraud scheme that targeted the metro Atlanta housing and condo market from 2000 through 2003.
“The mortgage fraud scheme orchestrated by Hill resulted in multi-million dollar losses to lenders and had an even more devastating impact on individual homeowners, neighborhoods and communities,” said United States Attorney David E. Nahmias. “This sentence, as substantial as it is, cannot compensate the many persons hurt by Hill‘s fraudulent actions. What we hope is that this sentence demonstrates to anyone tempted to participate in mortgage fraud, whether as a key player like Hill or as a participant on any level, that such criminal conduct will be prosecuted aggressively and punished severely.”
Rodney E. Clarke, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation, said, “These types of crimes create a significant loss of tax revenue, drive buyers into foreclosure, leave lenders burdened with bad loans and neighborhoods with abandoned and deteriorating properties. The sentence today does not replace the losses that were incurred due to this scheme, however, it does illustrate IRS CI’s commitment to pursuing individuals who commit these types of crimes.”
Hill was sentenced to 28 years in federal prison to be followed by 5 years of supervised release. He was also ordered to pay restitution of $41,764,244.40. Hill has been in custody since his conviction on 166 felony counts of the indictment by a federal jury on March 14, 2007, following an eight-week trial.
Hill was originally indicted on June 8, 2005. Also indicted at various times and subsequently pleading guilty to charges related to the multi-million dollar mortgage fraud scheme initiated and led by Hill were: William Chavis, 45, Atlanta Georgia; Jeremy Dercola, 29, Douglasville, Georgia; Michael Flake, 31, Stone Mountain, Georgia; Wesley Golden, 57, Atlanta, Georgia; Christopher Halcomb, 45, Cumming, Georgia, Wendell Higgs, 42, Suwanee, Georgia; Corney Jackson, 49 Detroit, Michigan; Wayne Jenkins, 49, Atlanta, Georgia; Rashid Muhammad, 36, Syracuse, New York; Julian Perez, 49, Roswell, Georgia; Brant Petree, 23, Marietta, Georgia; Theodore Tagalakis, 36, Atlanta, Georgia; and Andrew Wolf, 45, Alpharetta, Georgia.
Co-defendants who went to trial with Hill and were also found guilty of multiple felony charges include: Marcus Alcindor, 42, St. Lucia, Georgia, convicted of conspiracy, loan fraud, mail and wire fraud, and money laundering; Barbara Brown, 34, Marietta, Georgia, convicted of conspiracy, loan fraud, mail and wire fraud, and money laundering; Christine Laudermill, 40, convicted of conspiracy, loan fraud, wire fraud, and money laundering; Robert Powers, 45, Cumming, Georgia, convicted of conspiracy, loan fraud, mail and wire fraud, and money laundering; Leslie Rector, 35, Atlanta, Georgia, convicted of conspiracy, loan fraud, mail and wire fraud, and money laundering; David Thomas, 46, Hammond, Louisiana, convicted of conspiracy, loan fraud, and money laundering; and David Van Mersbergen, 46, Atlanta, Georgia, convicted of conspiracy, loan fraud, and money laundering.
According to Nahmias and the evidence at trial: Phillip E. Hill was the owner and operator of “We Build Atlanta, Inc.,” “The Estate Firm, Inc.,” “Estate Artistians of Georgia, Inc.,” “Estates Atlanta, Inc.,” and numerous other Georgia corporations. Hill controlled the affairs of each such corporation. Hill held himself out to be a real estate developer, and either individually or through one or more of the corporations he controlled, purchased and sold numerous residential properties in the Atlanta area. Hill oversaw the conspiracy, loan fraud, wire and mail fraud and money laundering activity related to mortgages obtained in the sale of over 50 homes and over 250 condominiums in eight Atlanta-area condominium complexes. These properties were all owned at one time by one of the Phillip Hill entities. Each property was sold at an inflated price to a straw purchaser who applied for a mortgage loan based upon the inflated price. Such a fraudulent transaction is called a mortgage flip. The straw purchasers who participated in these mortgage flips were paid a kick-back out of the excess loan proceeds for the use of their name and credit. The victim-lenders granted the loans based upon numerous false representations and documents regarding the credit qualifications of the straw purchaser, as well as false representations that the straw purchaser had paid a down payment, would reside in the home, and would be responsible for the loan payment. In addition, the lenders were induced to make the loans based on fraudulently inflated appraisals. Some of the properties were flipped more than one time.
Evidence at trial showed that the primary leaders of the complex fraud scheme included Phillip Hill, Leslie Rector, closely assisted by David Van Mersbergen. Hill alone received over $14 million in profits from the scheme. Evidence showed that Hill generated in excess of $112 million in fraudulent loans during the time of the scheme.
The appraisers who created the fraudulent appraisals used in the scheme were Julian Perez, Fred Farmer, and Barbara Brown. According to the evidence, appraisers were paid both their scheduled fees and received separate direct payments from Hill.
The loan officers, who provided submitted the fraudulent loans to the victim lenders included Wayne Jenkins, Theodore Tagalakis, Brant Petree, Wendell Higgs, Michael Flake and Wesley Golden, and Robert Powers. Evidence at trial showed that the loan officers received excessive fees for processing the fraudulent loans.
Hill was convicted of paying kickbacks to recruiters who found straw borrowers for the scheme. The recruiters included Christine Loudermill and David and Dean Thomas, William Chavis and Rashid Muhammad, who all received hundreds of thousands of dollars in the scheme. According to the evidence, David and Dean Thomas, and David Van Mersbergen also served as straw borrowers who received additional kickbacks for lending their credit to the scheme.
As part of the fraud scheme, two attorneys, Christopher Halcomb, Cumming, Georgia, and Andrew Wolf helped facilitate the fraud by submitting fraudulent documents, and at property closings, facilitating the distribution of the monies to the co-conspirators.
This case was investigated by Special Agents of the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Barbara Nelan and Special Assistant United States Attorney Richard Reed prosecuted the case.
God bless you!!!! I thank God that this crook was caught, my family lost everything we had because of him and I really appreciate the guys who took the time to investigate him and his dirty deeds. I’m just glad that he’s off the streets and can’t hurt anyone else. My family is desperately trying to recover and our recover is now much better because he’s behind bars.
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.
Bend Oregon Event to Help Homeowners Prevent Foreclosures Oregon.Gov
As part of an ongoing effort to help homeowners avoid foreclosure, state agencies are organizing a foreclosure-prevention event in Bend on Saturday, March 27, 2010.
Shelbyville Man Gets 2-Year Sentence For Loan Fraud Chattanoogan.Com
Prosecutor Gary Humble said the lost was approximately $2.3 million in the mortgage fraud involving hundreds of homes in the Shelbyville area.
Lend America, VP Ashley Banned from FHA Housing Wire
Michael Ashley, the embattled former vice president of Federal Housing Administration (FHA)-backed mortgage originator Lend America, and the company he worked for, were permanently banned from doing business in the industry last week.
Countrywide Tries to Pin Blame on Insurer Court House News
Countrywide Home Loans demands $111 million from Triad Guaranty Insurance, claiming Triad is trying to blame mortgage lenders for the insurer's role in the housing bubble and collapse.
Investors Say They Were Swindled in Property Scheme Fox 13 Now
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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