Ronnie Edward Duke, 45, Fenton, Michigan, pleaded guilty in connection with an extensive multi-million dollar mortgage fraud conspiracy.
As previously reported on Mortgage Fraud Blog, the information charges that the defendants, led by Duke, conspired to defraud mortgage lenders and obtain money and property by means of materially false and fraudulent pretenses and representations. The scheme lasted for close to four years, ending in July 2007 when the FBI executed seven search warrants in metropolitan Detroit, Michigan and Florida.
The scheme involved obtaining “real” loans and, in many instances, “ghost” loans, from mortgage lenders. “Real” loans were closed at the offices of a legitimate title company, and the related warranty deeds and mortgages were properly recorded at county registers of deeds. However, the loan application and other related documents were materially false and fraudulent in a number of ways. The borrower described in the loan application was not the true borrower but merely a straw buyer with an acceptable credit history who was recruited to assume that role for a fee. Any down payments were paid from proceeds of the scheme rather than from the borrower’s own personal funds. Verifications of deposit, when provided, were fraudulent because the account balance disclosed to the lender was artificially inflated by a temporary transfer of funds into the account from other participants in the scheme. The income of the borrower was in most cases inflated.
The “ghost” loans were used to obtain additional funds from mortgage lenders. The home sales that the “ghost” loans were supposed to finance were nothing but sham transactions, purporting to be secured by the residential properties purchased with the “real” loans. The purchase agreements and other closing documents were counterfeit. No legitimate title companies were involved. The warranty deeds and mortgages associated with the “ghost” loans went unrecorded, leaving the lenders completely unsecured.
Over the four-year period, the scheme involved more than 500 fraudulent mortgage loans, over 100 straw buyers, and approximately 180 different residential properties in metropolitan Detroit, Michigan that were used as — or falsely represented to mortgage lenders to be — the collateral for the loans. Most of these loans went into default and foreclosure. The loans ranged in size from roughly $350,000 to $600,000. Losses to the lenders resulting from the scheme are expected to exceed $100 million.
Scheme proceeds were used by the defendants to make monthly payments on the loans to keep the scheme afloat, to make down payments on “real” loans, to pay the straw buyers and other participants in the scheme, to finance unrelated businesses, and by some defendants to purchase luxury items, to include a helicopter, cars, boats, residential properties, and for extensive travel to the Caribbean and foreign vacation destinations.
Several of Duke’s co-conspirators, including William Camsell Wells, III, 42, Howell, Michigan; Wilinevah Richardson, 34, Davison, Michigan; Ryan Andrew Zundel, 38, Brewton, Alabama; Nicole Lynn Rothe (formerly Nicole Lynn Turcheck), 33, Gibraltar, Michigan; Anthony Edward Peters, 74, Monroe, Michigan; Donna Marie Walbrook, 50, Westland, Michigan; Harold Larsen, Jr., 46, Westland, Michigan and Hussein Abdul-Majid Bazzi,36, Inkster, Michigan previously pled guilty for their roles in this mortgage fraud conspiracy.
Duke pleaded guilty in United States District Court in Detroit before Judge Julian Abele Cook, Jr.
United States Attorney Barbara L. McQuade made the announcement. McQuade was joined in the announcement by FBI Acting Special Agent in Charge Edward Hanko of the Detroit, Michigan Division.
“Mortgage fraud harms our community because foreclosures lead to vacant homes, which lower property values and serve as havens for criminal activity,” McQuade said.
Defendant Dukeis scheduled to be sentenced by the Honorable Julian Abele Cook, Jr. on November 15, 2012. The parties’ plea agreement anticipates a custodial sentence of 10-15 years.
Defendants Richardson and Bazzi were previously sentenced to 5 and 2 years in custody, respectively.
This case has been investigated by the FBI, with the assistance of the U.S. Secret Service, and has been prosecuted by Assistant United States Attorneys Erin Shaw and Stephen Hiyama.