Kessler Holzendorf, 43, Jacksonville, Florida, was found guilty of conspiracy, multiple counts of mail fraud, and multiple counts of wire fraud, in connection with his involvement in a large-scale mortgage fraud scheme. Holzendorf faces a maximum penalty of 20 years in federal prison for each of the thirty-one counts. His sentencing hearing is scheduled for January 28, 2013. Holzendorf was indicted on April 13, 2011.
According to testimony and evidence presented at trial, Holzendorf was one of the masterminds behind a complex scheme to defraud a number of mortgage lenders on loans for high-end properties in the Jacksonville area, including a number of homes in the Bartram Springs subdivision.
The scheme involved Holzendorf and others recruiting real estate professionals as investors who, with Holzenorf‘s assistance, submitted false loan applications and inflated purchase prices for the sales. The loan applications included inflated sales prices, some false claims that investors were occupying the properties as their personal residences, and other false claims regarding the investors’ employment status and income levels. For each of the properties, lenders were tricked into believing that home improvements, usually noted as swimming pools, were being made to the properties.
In fact, no improvements were ever made. Funds (ranging from $50,000 to $250,000) for these improvements were paid through title companies for sham invoices payable to a sham company (Home Improvements and Repair by Design), which was controlled by Holzendorf. Following the closing, Holzendorf, who usually kept a fee, would return the monies to the buyers. As a result of the scheme, the lenders were tricked into providing substantial sums of money to the buyers at closing.
The scheme also included a real estate agent and a mortgage company affiliated with Holzendorf. Evidence introduced at trial showed that Holzendorf and other conspirators obtained real estate commissions of more than $339,000, mortgage broker compensation of more than $189,000, and illegal kick-backs to buyers of more than $1.1 million.
U.S. Attorney Robert E. O’Neill announced the jury’s verdict.
In commenting on the verdict, United States Attorney O’Neill noted, “Our office remains committed to prosecuting those involved in these types of fraudulent crimes. Mortgage fraud continues to be a priority of the Department of Justice and our district.”
FBI Special Agent in Charge of the Jacksonville Field Office, Michael Steinbach, commented, “The FBI is committed to vigorously pursuing the perpetrators of mortgage fraud at every level, and these investigations remain one of our top national priorities.”
FDLE Special Agent in Charge of the Jacksonville Region, Dominick Pape, stated, “The partnership of all the agencies associated to this case has led to an outstanding result. This outcome should send a message to potential violators that mortgage fraud will not be tolerated in Northeast Florida.”
This case was investigated by the Federal Bureau of Investigation and the Florida Department of Law Enforcement. It is being prosecuted by Assistant United States Attorneys Mark Devereaux and Mac Heavener.