Wednesday, April 19, 2006

Probation Sentences For Two in $6M Missouri Mortgage Fraud

Nathan J. Brinkle, 30, Kansas City, Missouri and Jonathan T. Jennings, 34, Lee’s Summit, Missouri were sentenced this morning to three years of probation, including six months’ house arrest for their roles in a scheme to defraud home buyers and mortgage lenders of more than $6 million. The court also ordered Brinkle and Jennings to pay approximately $2.4 million in restitution, which was the amount of actual loss by the mortgage lenders.

On June 2, 2005, Brinkle and Jennings, along with co-defendant Adam T. Kerr, Kansas City, Missouri, pleaded guilty to wire fraud and money laundering. A sentencing hearing for Kerr has not yet been scheduled.

Brinkle and Jennings, doing business as Brighter Homes East, Inc., and JB Renovations, both Kansas City, Missouri businesses, purchased and rehabilitated distressed properties for resale to investors. Kerr was a mortgage broker doing business as Platinum Mortgage II and later Pearl Mortgage in Kansas City, Missouri and he assisted the investors in obtaining mortgage loans.

According to Bradley J. Schlozman, United States Attorney for the Western District of Missouri, investors were advised that once they took possession of the

properties, all of the rehab work would be completed and Section 8 tenants would be allowed to occupy the homes, thereby generating cash flow for the investors. These investments were represented as no-money-down investments. To accomplish this, Schlozman said, the appraised values were inflated and on some occasions loan applications were prepared to falsely show the source of the down payment was the investor.

All three of the co-defendants admitted that they prepared various loan applications and supporting documents for the purchasers, which contained material false and fraudulent representations and admissions, which they submitted to the lending institutions to insure that the loan applications would be approved. As a result of this scheme to defraud, Schlozman said, between May 23, 2001, and August 30, 2002, the defendants made and submitted to lending institutions 94 false and fraudulent loan applications. The misrepresentations included: false installment payments information, falsified HUD-1 Settlement Statements, phony contracts for deeds, money provided at closing, and other pertinent information relied on by the lenders when making the loan.

As a result of the misrepresentations during this period, Schlozman said, various lenders made loans in an approximate total amount of $6,388,150, which were funds sent by wire transfers and interstate commerce.

Additionally, on October 19, 2001, Brinkle, Jennings and Kerr engaged in monetary transactions involving criminally derived property, through the deposits of checks payable to Platinum Mortgage II, drawn primarily on the accounts of Brighter Homes East, Brinkle and Jennings.

mortgage fraud

1. Even after pleading guilty and being sentenced, both of these characters are back in business. Brinkle is back at selling investment property and Jennings got to keep his real estate license and is still selling real estate.

   Be very wary of terms like these below that were actually copied from Jennings listings recently. This is meant as investment advice not an indictment of any one agent.

   Terms like “Owner will lease up” and “Owner will rent up units prior to closing” are dead giveaways that you’re headed for problems.  Common among the Kansas City Real Estate Market it to fill buildings with warm bodies and tell the investor it is leased.

   I’m not saying that is what this agent was implying here, but I do see it all the time with a number of properties throughout the Kansas City Metro. There are several agents who are well known and quite notorious for this.

   The problem is, who they fill it up with, and if they pay rent (or not) is not part of the deal. You get a building full of people who are seldom qualified, screened or even expected to pay rent.

   Many of the investor-victims that were defrauded in these scams and others have come to us looking for help. We offer property management and real estate sales. We cannot perform miracles. If you simply got scammed into paying too much, you hosed.

   Your buyer’s agent is only working for you if you buy. If you do not buy that agent makes ZILCH! Who do you think they represent. Pro-forma’s mean SQUAT! Do the math, do the homework and talk to a property manager in the area to see if the rents and vacancy rates are realistic

   While I am a real estate broker and I do sell investment property, it is in my best interest to see that our long-term relationship prospers. I want to manage the property for years until you decide it is time to sell and I want to sell the property for you. I cannot do that if I steer you to a rotten deal during the buying process.

   They could fill up an apartment complex with people from a homeless shelter and tell you it’s fully leased. They can also pee on your leg and tell you it’s raining. It’s up to you to figure out which is the truth.
   

   Posted by  on  11/02  at  01:06 PM

2. Anyone know if Adam Kerr was ever sentenced in the Mortgage Fraud case/or is it still pending?

   Posted by  on  06/11  at  07:56 AM

3. No, I have not seen it, but watch the KC Biz Journal and casenet. Casenet is a free online source for missouri public records.

   Posted by  on  06/11  at  09:36 AM