Tuesday, October 23, 2007

Texas Real Estate Investor Sentenced for Fraud

Vernon Cooks, Jr., a/k/a Jibreel Rashad, 40, was sentenced to 135 months in federal prison for operating a mortgage fraud scheme in the Dallas, Texas area.  In addition, at the sentencing hearing, U.S. District Judge Sam A. Lindsay ordered that Cooks pay approximately $1.4 million restitution.  Cooks is also presently under indictment in the Northern District of Texas in United States v. Donald W. Hill et al., Case Number 3:07CR-289, and is presently in federal custody on those charges.  At the hearing, District Court Judge Lindsay noted that he would consider setting a Bureau of Prisons reporting date for Cooks if he posted bond in the other case . 

As previously reported by Mortgage Fraud Blog, Cooks was convicted of one count of bank fraud, seven counts of wire fraud, and six counts of money laundering.  One other co-defendant, Abdul Rahman Karriem, who was involved in the same scheme has pled guilty.  Co-defendant Deirdre Dione Anderson, who was charged with six counts of wire fraud, was acquitted.

At trial, the government presented evidence that Cooks, who represented himself as a real estate investor and owner of ”Rashad Investment Group,” knowingly created a scheme to defraud mortgage lenders out of hundreds of thousands of dollars.  Cooks used straw purchasers to buy single-family homes in the Dallas area for amounts far above fair market value.  Straw purchasers testified that Cooks paid them to use their names and credit to purchase homes that Cooks was going to rent to others.  Cooks told the straw purchasers he would pay all closing costs, mortgage payments and taxes associated with the properties until he transferred the properties out of their names within six months to a year after closing.

To support the inflated sales prices of the homes, Cooks used fraudulent appraisals.  He also caused fraudulent loan applications and other supporting documents, including fraudulent tax returns, W2s, and employment, rent and deposit verifications, to be submitted to the mortgage lenders so that the straw borrowers would qualify for the inflated loans.  Once the lenders funded the loans, Cooks used the fraudulently-obtained proceeds to pay off the original, bona-fide sellers and kept the remaining funds for himself.  Cooks then allowed the mortgage loans to default in the straw purchasers’ names.

mortgage fraud

1. I think Jibreel was also indicted in what the feds are calling a massive conspiracy involving several Dallas City Council members and others including a local well known developer (and his wife and father) to steer low-income tax credit apartment approvals to one developer. The were investitaged by feds for several years and the indictments were very recently announced. More details can be found at www.dallasnews.com (Dallas Morning News) if you want to follow it.

   Posted by  on  10/24  at  03:43 AM

2. I just discovered your blog and was happy to see that you post about fraud schemes all over the place.  Thanks for not keeping it local to your own area.

   Posted by  on  10/25  at  07:26 AM