Thursday, March 22, 2007

Texas Real Estate Investor Convicted in Mortgage Fraud Scheme

Vernon Cooks, Jr. aka Jibreel Rashad, 40, real estate investor, was convicted after trial by a jury on all counts of a federal indictment that charged him with operating a mortgage fraud scheme in the Dallas, Texas area from approximately May 2003, through December 2004.

Specifically, Cooks was convicted of one count of bank fraud, seven counts of wire fraud, and six counts of money laundering.  Cooks is scheduled to be sentenced on July 2, 2007.  One other co-defendant, Abdul Rahman Karriem, who was involved in the same scheme has pled guilty and is awaiting sentencing.  Co-defendant Deirdre Dione Anderson, who was charged with six counts of wire fraud, was acquitted.

The government presented evidence at trial that Cooks, who held himself out as real estate investor and the 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, Texas 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 them out 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 rest of the funds for himself.  Cooks then allowed the mortgage loans to default in the straw purchasers’ names.

Karriem‘s guilty plea specifically admits that on April 4, 2003, Cooks entered into a contract to purchase a residence at 419 North Edgefield Avenue, Dallas, Texas for $130,000 and, on April 8, 2003, he contracted to sell that same residence to a straw purchaser for $221,000.  Karriem, who was a mortgage broker and owner of United Mortgage, Dallas, Texas, knowingly submitted to Wells Fargo, a loan application containing material misrepresentations regarding the straw buyer’s income, rental history and intent to use the loan proceeds to purchase a primary residence.  Wells Fargo funded the $208,229.49 loan. Cooks used a portion of the proceeds to buy the property and caused Signature Title Company to wire the excess loan proceeds of $81,679.14 into his personal bank account.  Karriem received over $5,000 of the proceeds.

mortgage fraud

1. ms. dollar please get your facts straight, the first verdict was a hung jury, i was originally charged with a conspiracy to aid & abett, every so called “straw buyer” was an investor who testified that they gave all their financial documents to the mortgage company. a conspiracy must consist of two or more people. i never gave info to mr. karriem or ms anderson. i am a buyer & seller and do not work in the mortgage industry, so how can i have a conspiracy with myself? As far mr karriem is concern, he pled guilty because he lied to the courts and gave the courts fraud info. and the fbi threaten him with others deals that he may have done, if he didn’t testify against me and they offered him a downward departered while he’s been incarcerated for the past 11 mos.i had a clean criminal history & never been any trouble before this, my attorney’s & i are already planning an appeal which we feel strongly about, because the jury went from a hung jury on last friday after 4 days of deliberation, to a guilty verdict on monday 3/19/2007. they did in two hours on monday, what they couldnt do in four days??? so, get your facts straight before you wind up getting sued.

   Posted by  on  03/22  at  11:02 AM

2. Ha! Ha! You are just mad because you got caught.  Being in the mortgage business I can say that it is people like you that have created such a disaster in our housing market that you should go to jail.  You and your attorney will lose your appeal, and waste more tax dollars doing it.

   Posted by  on  03/23  at  05:22 AM

3. I am sure this idiot thinks hes done nothing wrong. If they are not straw buyers then why did the homes foreclose? Because you never had any intention of paying. This is happening all over North Texas. Have fun in prison.

   Posted by  on  03/24  at  08:47 AM

4. It is great that the word is out and people continue to get prosecuted.  The ignorance of Mr. Rashad he new he was defrauding the Banks and the owners of the homes, if he was a True Real Estate Investor, Why would he contract the sale of the home for the 121,000 more, but hey everyone knows that a home can appreciate 121,000 in 4 days!  Good Job, and your a Smart guy, just think I’m sure you created more scams as brillant as this one. Why would we think less of you, Einstein.

   Posted by  on  03/26  at  03:09 PM

5. this is for the three clowns that is so brave to want to make a comment. many people have been innocently prosecuted because of these mortgage brokers and loan officers,(some not all) who only work on commission and will do just about anything to get a loan closed. And the people who are not being charged are some the lenders and their underwriting practices,just look at whats happening in the subprime lenders now. At my trial, which the first verdict was a hung jury, the governments own expert witness testified that an investor can be doing business and not know that fraud is being done around him or her. And for chris davis, please get out of the business for you must be a “dummy” if you’ve didnt know that “flipping a property or simultaneous closing is not illegal, your home is worth what somonelse will pay for it stupid. And please quit with the prison already it’s getting old, as far as i’m concern the whole world is a prison locked under God ‘s law, so if that is my destiny than that’s for God to decide, not for the (3) stooges.

   Posted by  on  03/28  at  05:26 AM

6. Look at who’s the “clown”, certainly isn’t the 3 gentlemen; they aren’t the ones who has been brought up on charges; poor jibreel rashad, you did nothing wrong, it was everybody else’s fault.  Grow up!  The 1st charge of hung jury was probably because “some pertinent info” was not allowed to be disclosed.  Are you so stupid to think that this is a 1 time deal.  Do you know what “ethical” means?  Didn’t think so.  Certainly, the DA has alot more evidence on other deals you were a party to.  I hope I am lucky enough to get on that jury.  In real estate for 26 yrs, i have seen jerks like you getting away w/way too much for way too long.  Hope you and “bubba” have a nice life together!  If you need a pen pal......

   Posted by anonymous  on  03/28  at  11:50 AM

7. not to defend Rashad, but some innocent people get caught up in these mortgage fraud cases. Mortgage fraud is such a problem the government to a shotgun approach to convicted people, they cast out a huge net and catch as many fish as possible and throw you back in one at a time. I myself was cauhgt up in a mortgage fraud case 2 years ago, I was facing 49 years in prison when I went to trail, the government stacked as many cards as they could against me, they mostly had peope lie on me who had already pled guilty and were tyring to get a lessor sentence. The government sometimes gets tunnel vision as well when they get their mind made up that someone is guilty they cant let go to the point of no return a lot of times. I was a residtial land developer, I bought land in Million Dollar home areas, put in the streets and sewers and sold my lots at whole sale to builder for a percentage of their profits when they sold the properties. What I didn’t know was that the seller was selling million dollars homes whole sales to investors who swore to have perfect credit and money. Of course all the loans had bad documents, but the building were worth what they banks had reviewd the appraisals at. The government swore I was the ring leader at the age of 22. Everyone else in my case was over the age of 40 with degrees and although they didn’t make a million dollars a year like they said on the apps they had good jobs. When the government thought I was second in command to the builder they tried there best to make everybody roll on me in order to get me to roll on the builder. Although there was fraud in the case all the people who purchased homes, which the governemtn called strw buyers lived in their homes and paid there mortgages until the government froze their assest and force them into foreclosure in order to drive up the loss in the case. At the end of the day I didn’t plead guilty and although everyone testified against me I won because I had wonderfu attorneys who knew what the government was going to try to do and I hired a private inestigator to reseach and interview everyone in my case to make sure the truth would come out. Everyone who testified against lied on the stand and were found out when my attornies hit the play button in the court room. So before you judge believe me you can be caught up just like Rashad if he is truly innocent. In America your not innocent until proven guilty, your guilty until proven otherwise becuase of people just like you. But don’t get me wrong Mortgage Fraud is a problem and it needs to be stopped. Don’t believe all the info you read, Rachel dollar posted my case on the site and it said that I was paid $2.8 million dollars to recruit straw buyers. At trail it was proven that I only recived $150,000 from the sale of the homes at that was my cut for selling the builder the property wholesale, and it was kind of tuff to believe that I would steal $2.8 million dollars when I had $12 million in the bank.

   Posted by  on  03/28  at  03:59 PM

8. I believe the Watkins case to be much different than Mr. Cooks/Rashad’s. Mr. Watkins was simply the developer selling land to builders.  What’s Mr Cooks/Rashad appears to have been doing is inflating property values in order to directly defraud mortgage lenders in order to make a profit.

   As a 10 year veteran at the Executive level in the mortgage lending industry, I can honestly say that this case sounds like one of the oldest mortgage schemes in the book.  It’s called “Flipping”, in the bad sense of the word (not like the shows we watch on A&E;or TLC). 

   The original article does leave out some critical information that would more clearly line out if this were a true Flipping Scam.  For instance, it says Mr Cooks/Rashad purchased a home for 130K in 4/03 and then sold it for $221K.  What the article fails to tell us is when he sold it for $221K.  If he held the property for a while (6-12 months) he would have received some appreciation as 03 was an extremely hot time in real estate.  He may have also made major renovations to the property raising its value.

   Not to say that he’s innocent, because, by this article, it doesn’t appear that he is, but there are more crucial pieces of information missing that could confirm a true Flip or Double Escrow.

   If that transaction mentioned in the article was a fraudulant Flip, Mr. Cooks/Rashad would have needed an appraiser in his pocket to get him the inflated value (no mention of a crookeed appraiser in this article) and, in most cases, a title company that is also willing to play ball (once again, no mention of a title company).

   I also worked for Wells Fargo for a number of years.  Wells Fargo/Norwest was hit with a major Flipping scam in the California condo market a number of years ago.  So bad that they stopped lending on all condos in CA for a while.  These guys know a Flip when they see one.  They have some of the best QC Auditors in the business and they wouldn’t have gone to the Feds if they didn’t believe they had an air tight case.

   Posted by  on  04/04  at  09:16 PM

9. Our Holy Book ( THE HOLY QU’RAN )says
   Al-Mutaffifin | 36 verses | Defrauding سورة المطففين
   Sura #83 | Makkah
   
   1 Woe to those that deal in fraud,-
   2 Those who, when they have to receive by measure from men, exact full measure,
   3 But when they have to give by measure or weight to men, give less than due. 
   4 Do they not think that they will be called to account?-

   Posted by  on  07/12  at  07:54 AM

10. May God’s peace be unto you all. I just want to say that most of you need not attack a person. The brother Mr Rashad is a good brother. I need not comment on the issue of mortgage fraud, for I am not qualified, however I know him personally and he has done more good than bad from my standpoint. You never know everything about a person, however believe him if he said he did no wrong. He may have found out after the fact, and thus was too late. We as muslims must stand against what is wrong even if it is against ourselves. I wish all of you would pray for the brother, and that God’s will be done. Remember God is the final judge, and he is the only one that can see all things. We only comment on what we think we know. In the end we are all with sin. You have done something you just did not get caught! I am not defending wrong, just speaking on all the hatefull things being written like you are so holy and without sin!!! Keep your head up my brother!! No matter what hold on to the five!!! I love you!!! Assalaamu Alaikum!!!

    Posted by  on  07/12  at  08:19 AM

11. I hope that punk *** ***** goes straight to jail because he got my Brother and his Wife for a lot of money and destroyed their credit. I know you, you punk!  You married that girl from Lake Charles, Louisiana and now she has to rear a child alone because of a lowlifed loser like you.  We as Black people have enough to deal with without you contributing to our problems.  I hope that the Feds find out about all of your illegal endeavors and charge you with that too! I wish I could get my hands on you and send you to Allah or whatever God you are worshipping this year punk. I know that this will probably rile you up and if it does, you can meet up with me and settle this my way.  No weapons, just two mad ass men getting down with the thangs fool!!  You are probably without a conscience so I am probably wasting time here Vernon Cook or Jabreel or ****** or whatever!

    Posted by  on  08/22  at  06:26 AM

12. you know usually i dont respond to ignorance, but since you was paid to put your comments up on this blog here we go. that same person your’e talking about, you wanted her, but she wouldnt have you because. In regards to your comments (low life), first of all you need to get one.

    with a name like “masterblaster” now i can understand how a lack of education breeds ignorance. you talk about your brother and his wife, if this is the same couple that was from beaumont,tx. did your brother tell you how he came to me wanting to invest into real estate, made $30k for purchasing 3 houses and after he couldnt buy anymore tried to convince me to let his wife buy a house, which i refused. i didnt think so.

    furthermore, what money? neither your brother, nor his wife ever gave me any kind of money! and far as their credit he managed his own houses, in fact one person actually signed a promissory note to lease, and buy back the property that he owned, so, please get your facts straight. your brother blew all of his money on expensive trips and clothes, which is not a surprise “since we are the only group of people who finance our own oppression” as a consumer that is. And when he ran out of money, he wanted to buy a new motorcycle, and tried to put his wife on a deal. the next time you speak with your brother please ask him a few simple questions, which is, how much money did you make? did he ever give me any money? and was i ever involved in doing his loan? i took my own personal money, and helped him close his deal, and watch the response you get. you see everybody wants to invest and make money, but knowone wants to take the risk or reponsibility that comes with investing. w.e.b dubois described the african american people , that looked to help to advance the social and economic improvement within our communnity as the “talented 10th” (look it up sometime). you dont know me nor do you have a clue about the tremendous amount of charity work, that i have contributed in the african american community. that’s more than you can say “mr drug dealer” i have always devoted my time in helping and aiding the cause within the black community. not tearing it down by selling drugs to help destroy our community (yeah, i heard about you). and as far as name calling, and what you would do to me, scriptures says “ when i was a child, i thought as a child, but know that i am a man, i must put away my toys. but i will say this for a “muslim” we will always establish peace, until that peace is disturbed. take it however you want to take it.....

    Posted by  on  09/10  at  11:33 AM

13. This comment is for master blaster,you said that Mr.Rashad Damaged your brother and wifes credit.
    You talk as if your brother did not receive any money, well he did 30,000 dollars to be exact and now he`s crying
    like a baby because he`s broke when he should have fulfilled his obligation to what he had agreed upon,but instead he splurged,so now he`s broke as a joke and
    crying foul. and as for you master blaster and the pot shots that you`re taking toward Mr.Rashad bringing up the fact that he married a woman from Louisiana,instead of you knowing Mr.Rashad sounds like you know his wife and from the sound of things you like his wife but she doesn`t like you.probaly had a crush on her but she never looked your way and can you blame her nobody want`s hatter.and in response to your comment about wanting to fight, I really had to laugh when I read that. listen and listen real good if you really wanted to fight Mr. Rashad why are you hiding behind the name master blaster, oh yea I forgot if you had listed your real name his wife might remember you.sucker

    Posted by  on  09/12  at  06:48 PM

14. WOW! You guys are really going at it!! No one knows another persons struggle nor what really happens in anothers life, but we are soo quick to point fingers, judge and accuse. This is why we do not prosper as individuals and thus as a whole.......

    Posted by  on  10/20  at  08:27 AM

15. this message is for mr. rashad contray to all the things going on with you and your current situations, just know that only and GOD alone will hand down your fate. Not those who judge us based on what is written on paper or what words are coming out of ones mouth. Everyone has their own right to say but it is just that, their own say.Yes Mean ignorance is gonna be poured out naturally but dont pour it back so GOD can have a clear path to you. many blessings jacqueline

    Posted by  on  05/17  at  12:13 PM