Mortgage Fraud Blog is the premier website for news and information on mortgage fraud and real estate fraud throughout the United States.
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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Pennsylvania Man Indicted on Conspiracy to Commit Mortgage Fraud Charges
Marlin Sprouts Jr., Uniontown, Pennsylvania, was charged with a single count of conspiracy to commit mortgage fraud, which included mail fraud, wire fraud, bank fraud and money laundering.
The indictment alleges that Marlin Sprouts, between January 2005 and December 2006, acted as a mortgage borrower from two financial institutions in a scheme operated by his daughter, Tiffany Lynn Sprouts, Allegheny County, to skim portions of loan proceeds from real estate purchases.
Tiffany Sprouts operated Sprouts Mortgage and Pope Financial Services Inc. in Pleasant Hills.
Specifically, the indictment alleges that Marlin Sprouts, acting as a straw buyer for his daughter and Michael McFerron Pope of Pittsburgh, applied for mortgage loans to purchase residential real estate selected by Tiffany Sprouts and Pope in southwestern Pennsylvania in exchange for a portion of the loan proceeds.
In the scheme Tiffany Sprouts created false documents in connection with the loans and created fake documents to “inflate the straw buyers’ employment and financial condition to overstate income and assets” to increase the money that could be borrowed against the properties.
The indictment also revealed that Tiffany Sprouts used real estate appraisals with inflated market values.
In January 2005, Marlin Sprouts allegedly deposited $200,000 into his personal bank account from his daughter and Tiffany Sprouts added her father’s name to one of her bank accounts to make it appear he had sufficient assets to qualify for the loans and make the down payment, the indictment alleges.
Marlin Sprouts falsely reported in his applications for the loans that the home, which is an uninhabitable residence on Sugarcamp Road in Venetia, would be his primary residence, the indictment revealed. After being approved for the loan, Marlin Sprouts made some repayments to “lull” the financial institutions into believing the loans would be repaid and to avoid foreclosure.
He was approved for the $922,500 mortgage loan in March 2005.
The indictment alleges that after the Marlin Sprouts and Tiffany Sprouts then took some of the loan proceeds for their own use, including the purchase of additional properties to further the scheme.
The indictment indicates that Marlin Sprouts allegedly received three checks - each for $9,573 - in March, April and May of 2006 and deposited the $28,719 into his personal bank account.
Last September the FBI charged Tiffany Sprouts with money laundering, bank, wire and mail fraud and obstructing justice.
She pleaded guilty to the charges, according to court records.
In a plea agreement, Tiffany Sprouts agreed to provide information against her father and others allegedly involved in the scheme who have not been charged.
Court records indicate that she could face up to 25 years in prison and $500,000 in fines.
Pope faces similar charges, according to court records.
U.S. Attorney Mary Beth Buchanan also charged James Andrew Spike, 43, of 184 Republic Road, Republic with conspiracy to commit mortgage fraud in connection with the Sprouts’ scheme.
The specific details of the charge against Spike remain sealed by court order, but Buchanan said Monday that Spike also acted as a straw buyer on Tiffany Sprouts behalf.
Federal agents from the U.S. Department of Treasury arrested Marlin Sprouts Friday at his home on Bailey Avenue at 6:30 a.m.
Marlin Sprouts, who was released on $10,000 unsecured bond following his arraignment in federal court in Pittsburgh, said Friday that the arrest stemmed from a real estate venture that “went sour” three or four years ago. He said Friday that he intends to clear his name.
Sprouts is the first black ever elected to serve a full term on City Council. He was sworn in to office just four weeks ago.
He did not return calls to his house Monday.
The arrest came just days after he announced that the Uniontown “deep, deep” financial trouble, with a general fund deficit of $1.2 million.
Sprouts worked for a utility company and in mills before he received an education degree from California University of Pennsylvania last year. He works as a substitute teacher in the Uniontown Area School District.
In response to the elaborate scheme purportedly operated by Tiffany Sprouts as well as several other businesses and people in the Pittsburgh area, Buchanan announced Monday the formation of a Mortgage Task Fraud Force to operate in the western district of the state.
Buchanan said Marlin Sprouts and James Spike were among 24 people charged with mortgage fraud in the Pittsburgh area.
They’re accused of schemes including property flipping, submitting fraudulent documents, overstating income and assets, and serving as straw buyers.
Buchanan says the frauds in all cases include hundreds of properties and is valued at more than $13 million.
Charles A. Jenkins, special agent in charge of the IRS Criminal Investigation Division in Pittsburgh said that combating mortgage fraud has become a priority for his agency.
“Today should serve as a warning to anyone who is contemplating mortgage fraud type schemes,” Jenkins said. “A law enforcement dragnet is now in place to begin the process of smothering this crime that does so much to cause financial harm and violating the law.”
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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