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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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Owner of USA Properties, LLC Convicted of Mortgage Fraud
William E. McKanry, 70, Warrenton, MO, was convicted of multiple conspiracy and fraud charges involving the multi-million dollar sale of 12 local properties.
McKanry owned, operated and managed USA Properties, LLC; his son, William C. McKanry owned, operated and managed USA Title, LLC; and Paula Enders, was a licensed mortgage broker. She operated under the mortgage brokerage company known as Foundation Mortgage, Inc.
According to testimony presented at trial, between December 2005 and January 31, 2006, the McKanrys' sold twelve real estate properties through Enders. The properties are located in Florissant, St. Charles, O'Fallon, Hazelwood, Lake St. Louis, Ballwin, St. Louis City and County, and the total sale price of the properties was approximately $2.7 million.
Enders would shop on-line to obtain mortgage financing for all of the 12 properties. On the loan applications for these properties Enders falsified that the source of the down payments, settlement charges, and subordinate finances were to be made by the buyer of these properties, when they were actually made by William E. and William C. McKanry, the sellers of the properties. All closings were made at USA Title, LLC, St. Louis County, and documents falsely showed the buyer as making cash payments that were actually made by the McKanrys.'
At the closings, Enders received $226,000 above her commission fees as the mortgage broker to buy Foundation Mortgage, Inc. On the seller's settlement statement these monies were falsely represented to be construction rehab costs on the particular properties. Money would be going to Paula Enders at the closings as construction rehab on these properties when they actually were to be used to purchase Foundation Mortgage, Inc.
Since the closing on the 12 properties at USA Title, 11 out of 12 properties ended up in foreclosure and were resold for $1.2 million for a loss of approximately $1.5 million.
USA Properties, LLC maintained and provided a list of their "for sale" properties to area brokers and real estate agents. The list identified the particular property address and corresponding "retail value" and "sale price". In order to sell the properties, USA Properties, LLC was willing to sell these properties below the purported appraised value to buyers. This market of favorably priced real estate to which Paula Enders, William C. McKanry and William E. McKanry had access provided an opportunity. By matching USA Properties, LLC with buyers, they exploited the difference between what USA Properties, LLC was willing to take for a property "sale price" and what a prospective investor, induced by special deals, willing to pay, i.e., the "spread" or "retail value".
William E. McKanry was convicted of one felony count of conspiracy to commit bank, wire and mail fraud; one felony count of making false statements; four felony counts of wire fraud; and three felony counts of mail fraud. The five-day trial was held before United States District Judge Charles A. Shaw.
Conspiracy to commit bank fraud carries a maximum penalty of five years in prison and/or fines up to $250,000; each count of mail and wire fraud carries a maximum penalty of 20 years in prison and/or fines up to $1,000,000; making false statements carries a maximum of 10 years in prison and/or fines up to $250,000. Restitution is mandatory. Sentencing has been set for December 22, 2009.
William C. McKanry, 43, St. Albans, MO; pleaded guilty June 25, 2009, to related charges and is scheduled for sentencing October 15; Paula Enders, 37, Florissant, MO, pleaded guilty in December 2008, and awaits sentencing October 22, 2009.
Acting United States Attorney Michael W. Reap announced the conviction.
Reap commended the work on the case by the Missouri Department of Insurance, the United States Postal Inspection Service and the Federal Bureau of Investigation; and Assistant United States Attorneys Tom Albus and Jeff Jensen, who prosecuted the case for the U.S. Attorney's Office.
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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