Mortgage Executive Turns Herself in on Mortgage and Wire Fraud Charges

admin —  March 12, 2009 — Leave a comment

Stacy Lynn Chamberlain, 42, Unionville, Virginia, was arrested on charges mortgage fraud on a federally insured bank and wire fraud on several mortgage companies and investors therein.

The Indictment charges Chamberlain with one count of Bank Fraud, upon Fremont Savings and Loan, based in Anaheim California, eighteen counts of Wire Fraud, and one count of Interstate Transfer of Money Taken by Fraud. The alleged victims of the eighteen fraud counts were various mortgage companies and investors. The defendant is facing a maximum exposure of 360 years in prison and $5,250,000 in fines.

The Bank Fraud Count charges that in early 2004, Chamberlain a branch manager for the Richmond Branch of Gateway Funding Diversified Mortgage Services of Horsham, Pennsylvania, planned to purchase a $489,900 house in Jarrettsville, Maryland, without putting any money down, which required her to obtain a first mortgage loan for $440,910 and a second mortgage loan for $48,990.

The indictment alleges that because her credit was bad and she could not qualify for such a loan, Chamberlain decided to purchase the house in the name of RLS, a nominee straw purchaser. However, because RLS had her own financial difficulties and could also not qualify for such a loan, it is further alleged Chamberlain created fraudulent income and employment information for RLS that would elevate her creditworthiness to A+ level so that Fremont would not verify the information as closely.

In reliance on the allegedly false statements, Fremont approved both loans and then sold the $440,910 first mortgage loan to Deutsche Bank and the $48,990 second mortgage loan to Citifinancial. Within a short time after the loans were made to Chamberlain, the indictment charges she stopped making the monthly payments and both loans went into foreclosure.

The Wire and Transfer Fraud counts charge Chamberlain with defrauding five mortgage companies and various investors out of money and their intangible rights to the honest services of their employees, by means of materially false and fraudulent pretenses, representations, and promises.  The total approximate loss to these victims was $1.4 million.

The indictment alleges that in order to obtain employment and partnership relationships in the mortgage field, Chamberlain misrepresented her academic credentials and previous loan production and performance levels. In reliance on these misrepresentations, the employers entered into contractual relationships with the defendant and provided her with substantial funds. After Chamberlain established those relationships and obtained money and property from the victims it is alleged, she then further misappropriated and attempted to misappropriate funds and assets, and took steps to cover up her misappropriations.

Dana J. Boente, United States Attorney for the Eastern District of Virginia; Jennifer Love, Special Agent in Charge of the Federal Bureau of Investigation; and Colonel W. Stephen Flaherty of the Virginia State Police announced the arrest and the unsealing of the indictment, which had been returned on March 3, 2009.

The case is being investigated by the Federal Bureau of Investigation, Charlottesville Division and the Virginia State Police. Assistant United States Attorney David T. Maguire is prosecuting the case for the United States.

Defendants are presumed to be innocent until and unless proven guilty.

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