Friday, September 05, 2008

Title Officer Sentenced To 5 Years

Rick A. Peterson, 34, Lenexa, Kansas, was sentenced by U.S. Chief District Judge Fernando J. Gaitan on Thursday, August 28, 2008, to five years in federal prison without parole. The court also ordered Peterson to pay a $2,500 fine.

On November 7, 2007, Peterson was convicted at trial for the mortgage fraud conspiracy as well as one count of wire fraud related to the sale of a residential property at 5034 Sunset Drive, Kansas City, Missouri, at an inflated price. Conspirators falsely represented to Fieldstone Mortgage that the sale price was $1.2 million, while in reality, the actual sale price was $707,000. Conspirators sought to obtain a loan to purchase the property through a fraudulent loan application and other fraudulent documents.

Peterson was a title insurance officer and loan closer from January 2004 through January 2007, first at Parkway Title in Overland Park, Kansas, then at Freedom Title in Kansas City, Missouri, where he was the manager of the office. He began handling loan closings for co-defendant Raymond Walter Zwego, Jr., 61, Kansas City, Missouri, in April 2004.

Peterson handled the majority of Zwego‘s fraudulent real estate closings - 56 properties with loans totaling approximately $15.8 million - each of which involved numerous false and fraudulent documents, as well as misrepresentations to multiple people and entities. These loans were financed by mortgages from 25 lenders, who sustained losses totaling approximately $6.2 million as a result of the fraud scheme.

Zwego pleaded guilty on October 19, 2007, to being the organizer and leader of the mortgage fraud scheme. Zwego owned and operated Xpress Car Sales, Xpress Car Rental, North Mission Investments, Cobalt Blue, LLC, and Indigo Blue in North Kansas City. Zwego also pleaded guilty to 11 counts of wire fraud related to sending, or causing to be sent, fraudulent documents in a series of facsimiles and an e-mail in furtherance of the conspiracy.

Peterson‘s primary role was to structure the closings in such a way that Zwego received funds from the loan closings, which required concealing the true situation from the lenders. Each transaction was premised on Peterson preparing the loan documents in a way to facilitate and conceal the scheme to pay Zwego loan proceeds. Peterson paid (or, in the case of the Sunset Drive property, was going to pay) Zwego approximately $3.3 million. Peterson received his normal commission and stood to receive a bonus on the amount of business he originated.

Peterson is the sixth co-defendant sentenced in the mortgage fraud scheme. Seven co-defendants pleaded guilty and two were convicted at trial.

James R. Rhoades, 48, Kansas City, was sentenced to five years of probation and ordered to pay a $2,000 fine and $5,395,843 in restitution. Jeremy A. Plagman, 30, Lee’s Summit, formerly an appraiser doing business as JET Appraisals in Lee’s Summit, was sentenced to two years of probation, including 30 days of home detention under electronic monitoring. As a condition of his probation, Plagman may not be involved in the real estate industry. Larry E. Barshaw, 57, and Linda M. Thompson-Barshaw, 59, Kansas City, Kansas, were each sentenced to five years of probation, including six months of home detention. The court also ordered each of these three co-defendants to pay a $2,000 fine, and ordered the Barshaws to pay $1,517,108 in restitution.

Monty J. Kinman, 27, Overland Park, Kansas, was also convicted at trial of conspiracy and wire fraud, and awaits sentencing. Kinman was the regional manager and a loan officer at Soldi Financial in Overland Park.

The Barshaws were recruited as “straw buyers,” posing as purchasers of the Sunset Drive property. In reality, the Barshaws never intended to reside at the residence or to make payments on the mortgage. They were to be paid $40,000 for their role in the conspiracy. Thompson-Barshaw is the owner of Colormarc, Inc., a remodeling business that employs her husband, Larry Barshaw.

James E. Coleman, 60, Kansas City, pleaded guilty on May 21, 2007, to his role in the mortgage fraud conspiracy and to wire fraud, and awaits sentencing. Coleman, a Certified Public Accountant who formerly served as president of the board of a Kansas City magnet school, also pleaded guilty to four counts of wire fraud.

Michael Rodd, 54, Olathe, Kansas, pleaded guilty on June 27, 2007, to his role in the mortgage fraud conspiracy. Rodd was a real estate broker doing business as Heartland of America, Inc., in Olathe. Rodd is currently a fugitive and a federal warrant has been issued for his arrest.

This case is being prosecuted by Assistant U.S. Attorneys Linda Parker Marshall and Gene Porter. It was investigated by the Federal Bureau of Investigation.

mortgage fraud