Monday, June 13, 2005
Twelve Indicted in Illinois HUD Fraud
Signatories on False Verifications Also Charged
Twelve people were indicted by an Illinois grand jury in connection with a FHA-insured mortgage scheme that involved 48 properties in the Freeport, Illinois area over a period of almost three years. The individuals indicted include not only the ringleaders and recruiters but also individuals who signed false VOEs and credit letters verifying false financial information on behalf of borrowers.
The individuals charged in the indictment are as follows:
Price Brooks, 50, Freeport, Illinois, worked at Brooks Detail Shop
Todd Ernst, 44, Freeport, Illinois - Owner of Ernst Roofing, Freeport, Illinois
Shawn Fleming, 21, Freeport, Illinois
Douglas Hastings, 39, Lena, Illinois – Owner of several businesses including Stagecoach Trail Realty & Auction, Lena, Illinois, Presidents Club (a bar in Freeport, Illinois) and Brooks Detail Shop (a car wash in Freeport, Illinois).
Edward Martins, 40, Lena, Illinois - Principal of R&J Renovations, Freeport, Illinois
Jeffrey Meyer, 50, Winslow, Illinois – Owner of independent insurance agency known as “Meyer Insurance Agency.”
Philip Miskimon, 49, Winslow, Illinois, Principal of R&J Renovations, Freeport, Illinois
Dale Nelson, 49, Freeport, Illinois – Owner of AMD Sales & Services, Freeport, Illinois, a computer sales and services business
Chad Nicks, 30, Freeport, Illinois – Owner of Planet Wireless, a cellular telephone business, Freeport, Illinois
Akia Sanders, 23, Freeport, Illinois
Julie Smith, 47, Lena, Illinois -Vice President of an independent insurance agency known as the Marvin Uecker Agency, Lena, Illinois
Tasha Thompson, aka Tasha M. Barnes, 25, Freeport, Illinois
Hastings and his wife were in the business of buying and selling residential properties in Freeport, Illinois. Miskimon and Martins were in the business of rehabilitating and selling residential properties in Freeport, Illinois as R&J Renovations.
The indictment alleges that between January 21, 2000 and October 15, 2003 the defendants conspired to defraud HUD by obtaining FHA insured mortgages based on false information and documents.
According to the indictment, Hastings and his wife purchased numerous inexpensive houses in Freeport, Illinois and elsewhere. Miskimon and Martins would cause minor repairs and improvements to be made to the houses in order to inflate the prices. Hastings then sold the houses at inflated prices that were far more than he paid for them.
As part of the conspiracy, Miskimon and Martins actively recruited buyers and would pay a $500 fee to anyone who referred them to a buyer. Sanders and Fleming each recruited several buyers. Miskimon and Martin would arrange for HUD loans for the buyers and would prepare and falsify documents necessary for buyers to meet HUD requirements including fraudulent VOEs and pay stubs. Nelson, Ernst and Brooks signed false VOEs fraudulently representing that buyers worked for their businesses. The business owners were often paid $500 to execute a false VOE. In exchange for $100 per letter, Meyer, Smith, Nelson and Nicks signed false credit letters stating that buyers had made regular payments on accounts with their businesses.
Sanders, Ernst and Thompson posed as relatives of the buyers, contributing gift funds to meet the 3% equity requirements. Hastings would actually provide the gift funds and Miskimon and Martin would deposit those funds to the account of the person posing as a relative of the buyer. Immediately after deposit, the funds would be withdrawn in the form of cashier’s checks or official bank checks made payable to the buyers and reflecting the false relative as the remitter. Copies of the checks would be placed in the buyer loan files. Then the checks would be cashed and the proceeds would be returned to Hastings.
The loan packages containing false documents were submitted to HUD approved mortgage companies that issued the loans.
The sixty-one separate counts of the indictment detail numerous loan transactions and allege conspiracy and false statements. In total, 48 properties were involved in the scheme, 40 of which have already been foreclosed by HUD.
Click here to view the indictment
mortgage fraud
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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.
More Trial Coverage
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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 
