Lance Kellow, 36, Henderson, Nevada, following a nine-day jury trial, was convicted of one count of conspiracy to commit mail and wire fraud, three counts of wire fraud and one count of bank fraud for committing mortgage fraud crimes that caused losses to federally insured financial institutions of over $1 million.
According to the indictment and evidence presented to the jury during the trial, Kellow, an experienced loan officer in the mortgage lending industry in southern Nevada, used his experience and knowledge to commit mortgage fraud and profit. On four different occasions, Kellow and his brothers lied to mortgage lenders in order to get real estate and money for their own use. Beginning in January and April 2007, Kellow and his brothers, Jason and Vince Kellow, conspired to sell their houses to their cousin, who was not qualified to buy them, for a significant profit.
Kellow and his brothers completed and sent lenders loan applications which contained false statements about their cousin’s employment, income, intent to occupy the property, assets, and financial liabilities. To help their cousin qualify for loans, the brothers deposited cash in his account, paid down his debt, and arranged for false verifications of employment and income, all without informing the lenders. They also omitted other property purchases and mortgage loans from their cousin’s loan applications. As a result of the false statements in the loan applications, lenders made loans to their cousin they otherwise would not have made enabling him to buy the properties.
The Kellow brothers received over $500,000 in cash from these sales. Lance Kellow personally received over $100,000. Because their cousin was not financially qualified to buy the properties, he was unable to pay the mortgages and they went into foreclosure. The total loss to the banks on the homes exceeds $1 million.
Kellow is free on a personal recognizance bond and is scheduled to be sentenced by U.S. District Judge Gloria M. Navarro on May 31, 2013. He faces up to 30 years in prison and fines of up to $1 million on each count.
Vinson Kellow pleaded guilty to wire fraud in January 2012. Jason Kellow pleaded guilty to conspiracy to commit bank fraud in August 2010. Sentencing dates for both will be scheduled in the near future.
Daniel G. Bogden, United States Attorney for the District of Nevada, announced the verdict.
The case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorneys Kathryn C. Newman and Christina Brown.
This case was handled in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.