Billy Cannon, Sr., Milwaukee, Wisconsin, a loan officer, and Margaret Keefe, aka Peg Keefe, a closing agent at Badger State Title and Trump Title, both located in Pewaukee, Wisconsin, allegedly devised and participated in a scheme to defraud banks and real estate lending institutions by submitting materially false and fraudulent loan applications.
The indictment alleges that between 2003 and 2007, Cannon and others would locate residential properties available for purchase on the north and northwest side of the city of Milwaukee, Wisconsin.
Cannon then allegedly paid straw buyers to use their names, credit histories, and signatures on mortgage loan documents ot fraudulently obtain funding to purchase the selected residential properties at inflated prices. The straw buyers often purchased several properties at the same time. The straw buyers never saw the properties to be purchased, did not negotiate the purchase price, did not intend to occupy the properties, and did not intend to make any mortgage payments with respect to these properties. The loan applications also overstated assets and income, and understated liabilities for the straw buyers. The loan applications also overstated assets and income, and understated liabilities for the straw buyers.
In addition to the false loan applications, false closing statements were submitted to the lenders. The closing statements falsely stated that the straw buyers were bringing their own funds to the closing. In truth, Cannon withdrew funds from an account he controlled in the name of Alledi and Associates, LLC to satisfy the cash due from the borrower at closing. The closing statements also falsely reflected that the seller received the bulk of the proceeds from the real estate transaction. In truth, Keefe did not disburse the funds as reflected in the closing statements. Instead, Keefe fraudulently issued and endorsed checks payable to Alledi and Associates, LLC, at the closings. Keefe disbursed at least $20,000 of the seller’s funds to Cannon at each closing, and did not disclose these payments to the lender. After completing the closings on the properties, the straw buyers failed to make payments on the mortgages, and the properties went nto foreclosure shortly after their purchase.
As a result, lending institutions incurred losses of more than $400,000.
The properties involved in the scheme include:
2341 N. 44th Street, Milwaukee, Wisconsin;
2353 N. 44th Street, Milwaukee, Wisconsin;
5327 N. 35th Street, Milwaukee, Wisconsin; and
3127 N. 39th Street Milwaukee, Wisconsin.