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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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
F. Jeffrey Miller Update - October 20, 2009
A hearing was held in Topeka, Kansas in front of Judge Julie Robinson. Miller is currently being held pending his sentencing which is set for December 22nd, 2009 at 9:00 a.m.. Steve Vanatta and Hallie Irvin, Miller's codefendants, will be sentenced at that time also.
Several motions were heard this week. One was a motion for Miller to be released pending his sentencing. Miller's attorney, Jeff Morris, argued that the court had dismmissed with predjudice the matter involving Miller's purchase of a commercial lawnmower, violating the court ordered monitoring agreement. He also argued that Miller was not a flight risk and should be released. This motion was denied.
Another motion heard by Judge Robinson was that of an escrow account containing proceeds from the sale of Miller's forfeited assets. This account has a balance of $143,000. Attorney Morris argued that his firm was due $100,000 for work done in the Miller matter, to date. The government argued that his 'un-itemized fees' were 'exhorbitant'. The balance of the funds, Morris argued, should be released to the Miller family to help pay for mounting household expenses.
The government argued that the 'Asset Forfeiture Provision' applies down to 'the last penny' and that 'the rights of the victims to made whole are of paramount immportance' and that no routine household expenses like Visa bills, are allowed.
Attorney Morris argues that there is more than enough assets to satisfy the jury's judgement of $2.65 million dollars. The government argues that the estimated value of his assets are only $1.4 million.
The government also stated that Miller has been paid dividends from a company Miller has an ownership interest in; Boreflex. From July, 2008 to present, Miller has been paid $330,509.30 from Boreflex, unbeknownst to the court appointed monitor.
Present in the courtroom was Todd Earnshaw. Earnshaw was indicted along with Miller and others in what is commonly referred to as 'Miller I'. That trial is scheduled to begin on January 11, 2010 in Topeka, Kansas.
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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 
