Charles E. Walker, 58, and his wife, Linda F. Walker, 59, and their son, Lee Edward Walker, 36, all of Monett, Missouri, who were all involved in a Springfield, Missouri, real estate company were sentenced in federal court for their roles in a nearly $11 million mortgage fraud scheme that involved more than two dozen residential properties and earned the family more than $1.3 million in illicit profits.
The defendants were sentenced in separate appearances before U.S. District Judge Ortrie D. Smith. Charles Walker was sentenced to 10 years in federal prison without parole. The court also ordered Charles Walker to pay $4,345,761 in restitution, which represents the actual losses suffered by the lenders as a result of the mortgage fraud scheme. He was taken into custody at the conclusion of the hearing to immediately begin serving his prison sentence.
Linda Walker was sentenced to one year and one day in federal prison without parole. Lee Walker was sentenced to 30 months in federal prison without parole. Both Linda and Lee Walker, who will self-surrender on April 2, 2012, to begin serving their prison sentences, are jointly and severally liable with Charles Walker to pay the $4,345,761 restitution.
Charles, Linda and Lee Walker have each pleaded guilty to their roles in a conspiracy to commit wire fraud, which was part of a mortgage fraud scheme that lasted from November 2004 to June 2006. Charles Walker also pleaded guilty to participating in a money-laundering conspiracy.
Charles Walker admitted that he was the organizer and leader of the mortgage fraud scheme, from which he personally profited more than $1 million. Conspirators were involved in fraudulent real estate transactions in relation to 26 separate parcels of real estate totaling $10,944,023 in mortgage loans.
Conspirators defrauded mortgage lenders by submitting fraudulent loan applications to purchase residential properties at artificially inflated prices, with a significant portion of the purchase price of each home being returned to the buyer without the lender’s knowledge or consent.
As a result of the scheme, conspirators received kickback payments of approximately $4.3 million. Most of the residential properties involved in the mortgage fraud scheme have gone into foreclosure.
The Walkers are among 17 defendants who have pleaded guilty and been sentenced in the mortgage fraud scheme.
Charles and Lee Walker were Missouri board-certified real estate brokers who sold residential real estate through Charles E. Walker Realty, Inc, a real estate company that listed, marketed and sold residential real estate in the Springfield area. Charles Walker was the owner of the firm and Linda Walker was the secretary. Charles, Linda and Lee Walker were also private investors who purchased and re-sold residential real estate through Walker Realty for personal financial gain.
Charles Walker and other Walker Realty agents and investors bought and re-sold residential real estate among themselves for increasingly inflated values. Co-defendants Juan A. Johnson, 43, William Wagoner, 56, and Steve Casarez, Jr., 34, who were mortgage brokers, prepared fraudulent mortgage loan applications. Those fraudulent applications included inflated incomes and false listings of assets and liabilities for the borrowers to assist them in qualifying to purchase the homes involved in this scheme. They also concealed from the lender the fact that a portion of the loan proceeds would be funneled back to the borrower (and others) after closing.
Co-defendants Vincent Cantrell, 42, and Charles V. Pursley, 84, who were both certified appraisers, prepared falsely-inflated appraisal reports to support the artificially-inflated sales prices of the homes being purchased in the mortgage fraud scheme.
Lee Walker admitted that he was personally involved in seven separate residential real estate transactions that were part of the mortgage fraud scheme. Those transactions totaled more than $3 million in loan proceeds, of which Lee Walker profited nearly $360,000. The total loss suffered by the lending institutions as a result of Lee Walker‘s fraud totaled more than $1 million.
Co-defendants Linda D. Hanks, 41, Frankie R. Powell, 69, Christopher Forrester, 31, Laura Greer, 43, and Tammy R. Fedel, 55, were Missouri board-certified real estate agents who worked at and sold real estate for Walker Reality. They were also private investors who purchased and re-sold residential real estate through Walker Realty.
Co-defendants Jess Kevin Cypret, 54, James Powell, 73, Eddie Lee Rohrs, 39, and Robert C. Barnica, 37, were investors at the firm.
Beth Phillips, United States Attorney for the Western District of Missouri, announced the sentencing.
This case was prosecuted by Assistant U.S. Attorney Robyn L. McKee. It was investigated by the U.S. Secret Service and IRS-Criminal Investigation.