Wednesday, April 16, 2003

Sentences and More Indictments in Georgia Mortgage Fraud

William S. Duffey, Jr., United States Attorney for the Northern District of Georgia; Andre Martin, Special Agent in Charge, Internal Revenue Service; Theodore Jackson, Special Agent in Charge, Federal Bureau of Investigation; and William G. Creel, Special Agent in Charge, District Office of Inspector General, U.S. Department of Housing and Urban Development, announce that multiple indictments were handed down today by a federal grand jury, and at the same time sentences have been handed down in federal court, in related cases of mortgage fraud with losses in the millions of dollars. According to Duffey:

Four indictments were handed down late this afternoon by a federal grand jury against ROGENA LUCILE McLEAN, age 49, of Stone Mountain, Georgia; GEORGE TOOMER, age 63, of Decatur, Georgia; TONY VERNARD ENDSLEY, age 43, of Lithonia, Georgia; JERRY WAYNE FRAZIER, age 45, of Atlanta, Georgia; CHRISTOPHER NORMAN, age 30, of Atlanta, Georgia; KAREN P. CHAMBERS, age 46, of Fayetteville, Georgia; ELLA MOORE, age 55, of Riverdale, Georgia; and VIVIAN L. TYSON, age 52, of Riverdale, Georgia.

Also late this afternoon, GLENN MELVIN ALLEN, age 45, of Lawrenceville, Georgia, was sentenced by United States District Judge Orinda Evans to 1 year, 6 months in federal prison, on charges of conspiracy to commit mortgage fraud. ALLEN, a former Atlanta-based manager of “Banker’s Financial Group,” a Greenbelt, Maryland, mortgage brokerage firm, submitted false qualifying documentation for borrowers to secure primarily FHA-insured home loans, as part of the scheme. ALLEN was also ordered to pay restitution of $142,378, and ordered to serve 3 years supervised release. Also late this afternoon, SANDRA R. RICE, age 46, of Stone Mountain, Georgia, was sentenced by United States District Judge Orinda Evans, on charges of conspiracy to commit mortgage and bank fraud, wire fraud, and other fraud charges. RICE was sentenced to 1 year, 3 months in federal prison, ordered to pay restitution of $357,624, and ordered to serve 3 years supervised release. RICE was a real estate agent with Re/Max of Atlanta, who was recruited by ROGENA McLEAN and others to assist in a widespread mortgage fraud “flipping” scheme between May, 1999, and February, 2000. RICE would assist unqualified “straw” buyers by finding properties for them in the Atlanta area, realizing a sales commission on each sale, as well as actually attending closings in such sales, only to generate more sales from the same homes at a later time with other unqualified buyers.

According to evidence in open court at today’s sentencing hearings, McLEAN, who was previously convicted of mortgage fraud, most recently attempted to recruit straw purchasers from a federal prison facility in Marianna, Florida, specifically, inmates who were about to be released; and also recruited straw borrowers from a drug treatment center in the Atlanta area and elsewhere, as part of the scheme. McLEAN directed the mortgage fraud scheme, approaching people who were behind in their mortgage payments and recruiting them to sell their property to a “straw” buyer, through mortgage brokers GEORGE TOOMER and TONY VERNARD ENDSLEY, and their companies ”Challenge Mortgage,” and ”Source One Mortgage,” based in the Atlanta area. According to the indictment, McLEAN also approached a local business owner to obtain a $1.2 million dollar mortgage on two of his properties, for the purpose of “cashing out” the mortgages at a substantial monetary gain to the defendants, and to turn the properties into “group homes” for juvenile delinquents, homeless, drug addicts and disabled individuals in an attempt to get additional government-paid revenue for the properties. In addition, the indictments outline other “straw” purchase frauds and attempts to influence or stop potential witnesses from testifying about the schemes in cooperation with federal investigators.

JERRY WAYNE FRAZIER, an attorney in the Atlanta area, caused to be filed false cancellation of security deeds on a number of properties, so that ill-gotten loan profits could be obtained by co-conspirators without having to satisfy liens, and so that other mortgage loans could be obtained on those properties. FRAZIER also laundered loan proceeds money through his law firm account and through the bank accounts of shell companies.

According to the indictment, CHAMBERS, TYSON and MOORE used the identity of a factory worker as that of a music publisher who earned $57,000 a month, when, in fact, the loan applicant was unaware of many of the loans obtained in his name, and never earned more than $40,000 in any year of his life. In one transaction, the defendants successfully obtained a mortgage loan for the factory worker in the amount of over $1 million for a luxury townhome in the Buckhead area; in another transaction they obtained another loan for over a half-million dollars for a luxury home in Fayetteville, Georgia; and in a third attempted transaction, were about to close a loan for the factory worker in the amount of over $2.1 million for another Fayetteville home. The defendants in one closing alone realized a cash payout of $352,000, and in another, $114,000.

According to the indictment, CHRISTOPHER NORMAN is charged with recruiting unqualified straw buyers for at least $4 million in fraudulent mortgage loans.

These cases are being investigated by Special Agents of IRS, Criminal Investigation, FBI, and the Office of Inspector General, U.S. Department of Housing and Urban Development.

Assistant United States Attorney Gale McKenzie is prosecuting the cases.

mortgage fraud