Mark Kellogg, 39, Shaker Heights, Ohio, was sentenced to 14 years for operating a large mortgage fraud scheme in Slavic Village, Ohio. Kellogg was ordered to pay restitution of $5,831,500 to lenders and $186,715 to 109 neighbors who sold properties located on the same city block as the foreclosures resulting from mortgage fraud.
Mark Kellogg, the deal maker and main defendant in the case, fraudulently acted as a mortgage broker and operated a criminal enterprise that involved others to fraudulently buy and sell 78 Slavic Village houses for profit. His enterprise ran numerous schemes to defraud lenders into making $5.8 million in bogus loans. Co-defendant, Beverly Cody, 43, Shaker Heights, Ohio, assisted Kellogg as a buyer and seller and took money for falsely claiming to work on the houses while doing business as Cody’s Cleaning Service.
On April 13, 2010, Kellogg pleaded guilty to the 103 count indictment. These counts included engaging in a pattern of corrupt activity, conspiracy of engaging in a pattern of corrupt activity, money laundering, theft by deception, securing writings by deception, telecommunications fraud, tampering with government records, and forfeiture of all proceeds Kellogg faced a maximum sentence of 106 years in prison, a maximum fine of $6.6 million, plus restitution. Beverly Cody pleaded guilty to one count of money laundering and three counts of theft by deception. She faced a maximum of seven years in prison and a maximum fine of $25,000. Cody received community control sanctions.
Included in the 103 counts of mortgage fraud offenses that Kellogg pleaded guilty to, were counts that identified the homeowners living near the houses listed in the indictment who sold their homes during this time period as victims who suffered economic losses as result of the criminal activity of these defendants. This was the first time anywhere in the nation that a mortgage fraud indictment included as victims homeowners living in the neighborhood as a result of their economic losses.
Had this case gone to trial, expert witnesses from Cleveland State University and Case Western Reserve University would have testified that these homeowners suffered economic losses as a result of the lost value of their home because of the fraudulent activity perpetrated by these defendants.
County Prosecutor Bill Mason and the Cuyahoga County Mortgage Fraud Task Force operating under authorization of Ohio Attorney General Richard Cordray and Ohio’s Organized Crime Investigations Commission announced the sentence.
Prosecutor Mason said, “Slavic Village has been identified as the epicenter of the U.S.’s foreclosure crisis. Today’s sentencing represents our diligent efforts in prosecuting these criminals and connects the fraudulent loans in the Cleveland area to Wall Street’s collapse.”
Cleveland City Councilman, Tony Brancatelli, Ward 12, said, “I, on behalf of the Slavic Village neighborhood, am thankful for the hard work and dedication of the task force who brought Mr. Kellogg to justice. This is a step in the right direction to punish those who prey upon our residents and have accelerated the foreclosure crisis in America. I hope this action serves as a deterrent for others who are, or may intend, to mislead homeowners here in Cleveland and across this country. With this closure, we can continue to work on reversing the damage Mr. Kellogg caused and rebuild our community.”
With funding from the Ohio Attorney General’s Office and the Organized Crime Investigations Commission, the Cuyahoga County Mortgage Fraud Task Force was formed in December 2007.
The Task Force is comprised of federal, state, and local law enforcement agencies: The Cuyahoga County Prosecutor’s Office, HUD Inspector General’s Office, Ohio Bureau of Criminal Identification and Investigation (BCII), Cuyahoga County Sheriff’s Office, FBI, and Beachwood Police Department assisted in this continuing investigation. Other Task Force agencies include the U.S. Attorney’s Office, U.S. Postal Inspector, Pepper Pike Police Department, Solon Police Department, Cuyahoga County Recorder, Cuyahoga County Treasurer, and Department of Commerce-Division of Financial Institutions. The director of the Task Force is a Cuyahoga County Sheriff Deputy.