Wednesday, July 09, 2008
Sentences Handed Down In Austin Texas Area Mortgage Fraud Scheme
12 individuals convicted for their roles in a multi-million dollar mortgage fraud scheme led by Cornelius Robinson were sentenced in U.S. District Court. The overall conspiracy involved sixteen named defendants, at least 33 properties, 19 financial institutions and over $4.5 million in claimed losses. United States District Judge Sam Sparks sentenced four of five defendants who were convicted after a two week jury trial that ended on March 28, 2008. They are:
Michael Breon, 39, formerly of Austin, Texas, and a current resident of McKinney, Texas, and a straw purchaser in the scheme to 48 months in federal prison followed by five years of supervised release. Judge Sparks also ordered Breon to pay a $63,000 fine. Breon was convicted by the jury of conspiracy to make false statements related to a loan, one count of wire fraud and one count of conspiracy to commit money laundering. Breon, a licensed loan officer and mortgage broker, was employed by several different loan origination and mortgage companies during the conspiracy;
Sindhu Sukumaran, 37, wife of Michael Breon and a straw purchaser in the scheme to 18 months in federal prison followed by five years of supervised release. Sukumaran was convicted by the jury of one count of wire fraud;
Marlon Nathan Torres, 46, Hutto, Texas, a licensed real estate agent and buyer and seller of real estate in the Austin, Texas area to 24 months in federal prison followed by three years of supervised release. Judge Sparks also ordered Torres to pay a $24,000 fine. Torres was convicted by the jury of one count each of conspiracy to commit money laundering and money laundering;
Jeffery Andre Wilkins, 46, Austin, Texas, a cousin of Cornelius Robinson and a straw purchaser in the scheme to 30 months in federal prison followed by five years of supervised release. Judge Sparks also ordered Wilkins to pay a $6,000 fine. Wilkins was convicted by the jury of one count each of conspiracy to commit both wire fraud and providing false statements related to a loan, false statement related to a loan, conspiracy to commit money laundering and money laundering.
United States District Judge Sam Sparks also sentenced eight other defendants who had pled guilty to offenses related to the fraud scheme:
George H. Watson, 55, Austin, Texas, who served as the closing attorney on most of the real estate transactions involved in the scheme, to 57 months in federal prison followed by five years of supervised release. In March, Watson pleaded guilty to one count of Conspiracy to Commit both Wire Fraud and False Statements Related to a Loan;
James Douglas Atwood, 51, Austin, Texas, Cornelius Robinson‘s uncle and a straw buyer in the scheme to three years probation. Judge Sparks also ordered Atwood to pay a $6,500 fine. In February, Atwood pleaded guilty to one count of Conspiracy to Commit Provide False Statements Related to a Loan;
Russell Snead, 44, Seattle, Washington area, was a straw purchaser in the scheme to 24 months in federal prison followed by 3 years of supervised release. Judge Sparks also ordered Snead to pay a $50,000 fine. In March, Snead pleaded guilty to one count of Conspiracy to Provide False Statements Related to a Loan;
Doris Ann Hill, 40, Austin, Texas, to three years probation. Judge Sparks also ordered Hill to pay a $1,800 fine. In February, Hill pleaded guilty to one count of Receiving a Commission or Gift in related to the Fraudulent Application for a Loan. For a fee, Hill, a personal banker employed at Wells Fargo Bank, agreed to provide a false verification of deposit to loan underwriters in relation to three real estate transactions involving defendant Snead;
Julius Meyers Lofton, 45, licensed real estate agent, Austin, Texas, and a straw buyer in the scheme to three years probation. Judge Sparks also ordered Lofton to pay a $1,800 fine. In February, Lofton pleaded guilty to one count of Conspiracy to Provide False Statements Related to a Loan;
Roy Rivers, 52, Austin, Texas, and a straw buyer in the scheme to one year of probation. In February, Rivers pleaded guilty to one count of Conspiracy to Provide False Statements Related to a Loan;
Danielle Guice Rosas, 40, Austin, Texas, and a straw buyer in the scheme to two years probation. Judge Sparks also ordered Rosas to pay a $1,200 fine. In February, Rosas pleaded guilty to one count of Conspiracy to Provide False Statements Related to a Loan;
Stanley Ma, 28, Honolulu, Hawaii, and a straw buyer in the scheme to 24 months in federal prison followed by 3 years of supervised release. In February, Ma pleaded guilty to one count of Conspiracy to Provide False Statements Related to a Loan.
Co-defendant Leroy Williams, 47, Austin, Texas, was sentenced on June 12, 2008. Williams was a straw buyer in the scheme was sentenced to three years probation including 30 days of home confinement after pleading guilty to one count of Conspiracy.
Sentencing for ringleader Cornelius Robinson, age 48 of Austin, is scheduled for 9:00 a.m. on August 8, 2008. Robinson was convicted on multiple counts of fraud by the jury at the conclusion of the trial in March. Robinson‘s wife, Silvia Seelig, 46, Austin, Texas is scheduled for sentencing after having pled guilty to Conspiracy to Commit both Wire Fraud and Provide False Statements Related to a Loan. Leonard Brown, 38, Houston, Texas, is also scheduled for sentencing. In March, Brown pleaded guilty to one count of Conspiracy to Provide False Statements Related to a Loan.
From September 1999 to present, the defendants participated in a scheme to defraud mortgage lenders, including federally insured financial institutions, with regard to loans acquired to purchase 33 properties in the Austin and San Antonio, Texas area. The scheme centered upon the use of real estate flips. That is, the defendants purchased property at one price and would immediately sell, or flip, the property to a straw buyer at a higher price. In doing so, the mortgage lenders were deceived as to the true nature of the transaction and the financial status of the straw buyer. The straw buyers did not make the subsequent monthly mortgage payments and all of the loans have gone into default. All of loans have been either foreclosed upon or are the subject of current foreclosure proceedings.
“Mortgage fraud damages the stability of our national housing market and hurts American homeowners. Today’s sentences make clear that those who lie, cheat and steal in these corrupt schemes will pay the price,” stated United States Attorney Johnny Sutton.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigations. The case is being prosecuted for the government by Assistant United States Attorney Mark Lane.
mortgage fraud
As a matter of fact,these sort of scams has been happening since time immemorial and the public has to be vigilant.
Posted by on 07/10 at 01:18 AM
One of the convicted, Marlon Torres’ home was foreclosed on a few months ago. It was for sale before that (with undisclosed and serious foundation damage). I guess he was still trying to run a scam from behind bars. Some nerve! I hope he stays out of real estate when he gets out of prison!
Posted by on 01/20 at 08:45 PM
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Erie Area Mortgage Broker Gets Prison in Fraud Case
GoErie.com - Erie, PA
Shortly before receiving a nearly three-year federal prison sentence, former mortgage office manager Francis R. Conti told the judge he never meant to defraud any of the homeowners caught up in a widespread local mortgage-fraud scheme.
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Federal charges were filed today against 37 people and four companies in five separate mortgage fraud cases.
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Mortgage fraud has increased so dramatically in the San Joaquin Valley that a task force of federal, state and local agencies has been formed to fight back.
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In the past 12 months his firm has been retained to conduct over 300 mortgage fraud investigations, a 100% increase from 2007.
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Scavitti admitted that between 2003 and August 2008 he unlawfully diverted mortgage funds that were wire transferred into his client office account to his own personal benefit, resulting in losses in excess of $2.5 million.
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
Update - US v. F. Jeffrey Miller, et al.
Miller II: Judge Julie Robinson has ruled in favor of the defense motion granting a continuance for sentencing of the 3 convicted defendants: F. Jeffrey Miller, Steve Vanatta and Hallie Irvin. The three will now be sentenced after ruling on post trial motions set for August 10, 2009.
Vanatta has been in custody for over 2 years. Vanetta filed a motion for his release pending sentencing. That motion was denied.
Miller remains free pending his sentencing. He has hired a new attorney who filed a motion to delay Miller's sentencing. In one post trial motion, the defense argues as to what assets are subject to seizure.
Defendant Todd Earnshaw is a Kansas City real estate Broker (and brother in law of Miller). Earnshaw has been indicted in what is commonly referred to as Miller I. A trial date for that matter has been set for January, 2010 in Topeka, Kansas.
The Government filed a motion to revoke Earnshaw's bond and remand him to custody while he awaits trial after learning that he allegedly committed the state crimes of Driving Under the Influence, Handicap Parking Violation and Failure to Control Speed to Avoid a Collision while on pretrial release. Notwithstanding finding that probable cause existed to believe that Earnshaw committed the aforementioned state crimes, Judge Robinson denied the motion, but ordered several strict conditions that Earnshaw must follow pending his trial.
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Rachel Dollar is an attorney and Certified Mortgage Banker who handles fraud recovery litigation for lenders and secondary market investors nationwide. She is a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is licensed to practice law in California and maintains offices in Santa Rosa, California. 
