Christopher Lee Horn, 58, and Sondra Horn, 57, both of Richville, Minnesota, a former Mount Vernon, Ohio couple pleaded guilty today to accepting federal mortgage assistance in Ohio while living in another state and renting the Ohio property to a tenant.

Part of the relief programs funds targeted aid to families in states hit hard by the 2008 economic and housing market downturn. The program provided state housing finance agencies funding to develop locally tailored foreclosure prevention solutions. In Ohio, the housing finance agency created “Save the Dream Ohio,” a statewide program focused on unemployed and underemployed homeowners at risk of mortgage loan default or foreclosure.

According to court documents, the Horns admitted to receiving more than $14,000 in Save the Dream Ohio mortgage assistance funds to which they were not entitled.

In September 2014, the couple received more than $2,800 in rescue payment assistance and was approved to receive 18 monthly mortgage assistance payments of $692 each for their property at 18 Marion Street in Mount Vernon.

Also in September 2014, Christopher and Sondra Horn negotiated to rent their Marion Street residence to a tenant for $655 per month. In later months, the amount increased. The couple requested the tenant pay his monthly rent in cash or personal check to a third party, who then deposited the money into a joint credit union account controlled by the Horns.

Both pleaded guilty to conspiring to defraud the United States Treasury Department’s Troubled Asset Relief Program.

Each pleaded guilty to conspiring to commit theft of government property, a crime punishable by up to 10 years in prison.

Today the defendants join 388 defendants convicted of crimes the Special Inspector General for the Troubled Asset Relief (SIGTARP) investigated,” said Special Inspector General Christy Goldsmith Romero. “Christopher and Sondra Horn knowingly defrauded a TARP program that helps unemployed homeowners stay in their primary home. The Special Inspector General commends the Office of the U.S. Attorney for the Southern District of Ohio for standing with SIGTARP to combat rescue fraud.”

Congress sets the maximum statutory sentence. Sentencing of the defendants will be determined by the Court based on the advisory sentencing guidelines and other statutory factors.

David M. DeVillers, United States Attorney for the Southern District of Ohio; and Special Inspector General Christy Goldsmith Romero, Troubled Asset Relief Program; announced the plea offered today before U.S. Magistrate Judge Norah McCann King. Assistant United States Attorney Sheila G. Lafferty is representing the United States in this case.


Aminullah “David” Sarpas, 37, Irvine, California and Samuel Paul Bain, 40, Tustin, California were sentenced late this afternoon, with one being ordered to serve 12 years in federal prison, for their key roles in businesses that offered bogus modification programs to homeowners struggling to pay their mortgages in the wake of the 2008 financial crisis.

The two defendants who were associated with the Santa Ana, California based company U.S. Homeowners Relief and several related businesses participated in a long-running “advance fee” scheme that caused more than 1,600 homeowners to suffer over $3.5 million in losses. Many victims lost their homes in subsequent foreclosure proceedings.

The Defendants were also co-owners of Greenleaf Modify, Waypoint Law Group, and American Lending Review.

Sarpas and Bain established U.S. Homeowners Relief in late 2008, using it and the subsequent companies to offer programs that falsely offered to help distressed homeowners obtain modifications of their mortgages. Sarpas and Bain initially marketed the programs themselves, but they also used TV, radio and internet advertisements, as well as a team of telemarketers to entice victims. Homeowners who agreed to participate – based on false claims, including that the companies had a 97 percent success rate in obtaining loan modifications that dramatically reduced monthly mortgage payments – were charged an advance fee ranging between $1,450 and $4,200. In short, the scheme “compounded these homeowners’ financial woes by inducing them to dig the hole they were in even deeper,” prosecutors wrote in court documents.

There were two other defendants named in a 2014 indictment. One man was acquitted of all counts. The fourth defendant, Louis Saggiani, 70, Huntington Beach, California pleaded guilty and is scheduled to be sentenced in October.

Sarpas was sentenced to 144 months in federal prison after being convicted by a jury in April 2019 of 10 counts of conspiracy and mail fraud.

Bain was sentenced to five years in prison after pleading guilty in 2016 to conspiracy and mail fraud.

The two men were sentenced by United States District Judge Cormac J. Carney.

The investigation was conducted by the United States Postal Inspection Service, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and IRS Criminal Investigation.

This matter was prosecuted by Special Assistant United States Attorney Ryan G. Adams of the Santa Ana Branch Office and Assistant United States Attorney David H. Chao of the Major Frauds Section.

Mary Beyer Halsey, age 59, Rising Sun, Maryland, the former President and Chief Executive Officer of Cecil Bank, pleaded guilty today to the federal charges of conspiracy to commit bank fraud, receipt of a bribe by a bank official, and false statement in bank records, in connection with the straw purchase of a home in Elkton, Maryland, upon which Cecil Bank had foreclosed.

Cecil Bank, located in Elkton, Maryland, had received $11,560,000 in federal taxpayer funds in 2008, under the Capital Purchase Program, as part of the Troubled Asset Relief Program. On April 20, 2011, Cecil Bank initiated the foreclosure of a single-family house located at 127 Ebenezer Church Road in Elkton.

According to her plea agreement, from 2012 to 2013, Halsey conspired with Daniel Whitehurst, an employee of a real estate development company that did business in Maryland, to defraud Cecil Bank and another bank to purchase a home through false pretenses, representations and promises. Specifically, on March 28, 2012, Halsey and Whitehurst met at a restaurant in Cecil County. Whitehurst asked Halsey if she could help him and a business partner get a $500,000 line of credit from Cecil Bank. Halsey agreed to help Whitehurst to obtain a line of credit from Cecil Bank, in exchange for Whitehurst agreeing to serve as the straw purchaser of 127 Ebenezer, Elkton, Maryland on behalf of Halsey. Halsey suggested that she increase the line of credit for Whitehurst to $650,000 to include the funds needed to buy the house. Whitehurst agreed to Halsey’s request to secretly buy 127 Ebenezer on Halsey’s behalf. On May 9, 2012, Halsey participated in a loan committee meeting at Cecil Bank that considered and approved a $650,000 line for credit for Whitehurst and a $500,000 line of credit for his business partner.

Halsey admitted that at her request, on May 14, 2012, Whitehurst visited 127 Ebenezer and provided Halsey with an estimate of the costs to update the house. Whitehurst determined that beyond replacing the kitchen subflooring at a cost of about $1,000, there were no significant repairs needed. Whitehurst provided a letter of intent to purchase the home from the bank for $150,000 for Halsey to review. Halsey suggested lowering the price to $145,000 to allow room to increase the offer later. Halsey knew that an exterior-only appraisal of the property ordered by Cecil Bank on November 9, 2011, showed a market value of $263,000. A full appraisal on September 10, 2012, reflected a market value of $295,000. To support the below-market price that Halsey wanted to pay, Whitehurst included in the letter of intent a list of lower-priced home sales in the same area that were not comparable to 127 Ebenezer and therefore was not reflective of the property’s actual market value.

As detailed in the plea agreement, on May 23, 2012, Whitehurst e-mailed Cecil Bank his offer to purchase 127 Ebenezer for $145,000. On the same day, during a meeting of the Cecil Bank Board of Directors, Halsey advised the Board that Whitehurst had made a purchase offer of $140,000 for 127 Ebenezer, $5,000 less the actual offer. To support the below-market price of $140,000, Halsey falsely characterized the property as having “structural deficiencies [that] will require significant repairs.” Halsey did not disclose her personal interest in the property, nor Whitehurst’s role as her nominee to acquire the property on her behalf. The Board authorized Halsey to “negotiate the best price.” Thereafter, Whitehurst submitted a contract for him to purchase 127 Ebenezer from Cecil Bank for $150,000, which Halsey signed on August 17, 2012 on behalf of Cecil Bank.

According to the plea agreement, subsequent to authorizing the sale of 127 Ebenezer, Halsey told Whitehurst that he should not use his line of credit from Cecil Bank to purchase the house, but should instead get the funds from a different source. Whitehurst applied for and obtained a $100,000 loan from another bank to purchase 127 Ebenezer, fraudulently claiming that he was purchasing the property for himself and that the down payment was from an investment account. On October 31, 2012, prior to 127 Ebenezer going to settlement, Halsey wired $75,000 to Whitehurst’s bank account to cover the cost of the down payment as well as closing costs and upgrades to the property that Halsey directed Whitehurst to arrange. To conceal the true purpose of the wired funds, Whitehurst sent Halsey a fictitious real estate contract purporting to show that the $75,000 was the down payment for a different property that Whitehurst owned in Havre de Grace, Maryland.

On November 21, 2012, the settlement of 127 Ebenezer was held with Halsey representing Cecil Bank as the seller, and Whitehurst as the purported purchaser, selling the property to Whitehurst for $150,000. Both signed the HUD-1 form which falsely represented that Whitehurst had paid approximately $52,566 at settlement, when in fact, the down payment and all related closing costs were paid from the $75,000 Halsey had wired to Whitehurst’s bank account beforehand. From October 31, 2012 through March 29, 2013, Halsey transferred an additional $60,000 to Whitehurst to cover the cost the upgrades to the house that they had previously discussed, as well as to reimburse Whitehurst for mortgage payments he made on the property. Halsey and Whitehurst also made plans to transfer title of the property to Halsey by selling the house to her at a price that would minimize the tax consequences of the sale for Whitehurst.

In December 2012, in response to a question from a bank examiner for the Federal Reserve Bank of Richmond inquiring about the sale of the property to Whitehurst, Halsey falsely stated that she was “not totally familiar with [that] property” and that the bank had difficulty marketing the property and had not listed it with a realtor because of “issues with the county over the bonds outstanding.”

In April 2013, federal agents began interviewing employees and other borrowers about banking irregularities at Cecil Bank. Title to 127 Ebenezer was never transferred to Halsey. Halsey never told the bank that she was the true purchaser of 127 Ebenezer, nor did the bank know that Halsey and Whitehurst had orchestrated the sale of the foreclosed property at the fraudulent price of $150,000, instead of the appraised pre-renovation price of $295,000.

As a result of Halsey’s misrepresentations and omissions, the bank lost approximately $145,000.

Halsey faces a maximum sentence of 30 years in federal prison for each offense: conspiracy to commit bank fraud; false statement in bank records; and receipt of a bribe by a bank official. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors. U.S. District Judge Deborah K. Chasanow has scheduled sentencing for November 6, 2020 at 11:00 a.m.

The guilty plea was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Mark P. Higgins of Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG), Mid-Atlantic Region; Special Agent in Charge Patricia Tarasca of Federal Deposit Insurance Corporation, Office of Inspector General (FDIC/OIG), New York Region; Special Inspector General Christy Goldsmith Romero for the Troubled Asset Relief Program (SIGTARP); and Inspector General Hannibal “Mike” Ware of the Small Business Administration, Office of Inspector General (SBA/OIG).

Mary Beyer Halsey used her position as President and CEO of Cecil Bank for her personal benefit, causing a loss to the bank, which had already received federal taxpayer funds as part of the Troubled Asset Relief Program,” said U.S. Attorney Robert K. Hur. “Corrupt bank officials undermine the public’s trust in our financial system.

The Federal Housing Finance Agency Office of Inspector General (FHFA-OIG) is committed to investigating allegations of fraud committed by officers of financial institutions which are members of the 11 Federal Home Loan Banks (FHLBanks) because their crimes strike at the heart of the FHLBank System,” said Mark Higgins, Special Agent in Charge of the FHFA-OIG’s Mid-Atlantic Region. “We are proud to have partnered with the U.S. Attorney’s Office for the District of Maryland on this case.”

This plea illustrates the tremendous harm bank insiders can cause when they use their positions for personal gain, breaking the trust placed in them by their employees, shareholders, and customers,” said Patricia Tarasca, Special Agent in Charge, New York Region, Office of Inspector General for the Federal Deposit Insurance Corporation. “We thank our law enforcement partners and appreciate the cooperation between investigating agencies.

Today, another bank CEO pleads guilty to committing fraud against the bank while the bank was in TARP,” said Special Inspector General Christy Goldsmith Romero. “Cecil Bank CEO Halsey pled guilty to conspiracy to commit bank fraud, making false statements in bank records, and receiving a bribe in a fraud that caused losses to Cecil Bank. Taxpayers lost nearly $11 million in TARP when Cecil Bank failed. SIGTARP commends U.S. Attorney Robert Hur and his team for fighting financial fraud related to TARP.”

OIG and its law enforcement partners are poised to root out fraud and bring wrongdoers to justice,” said SBA Inspector General Hannibal “Mike” Ware. “I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice.”

Daniel Whitehurst, age 36, Bel Air, Maryland, pleaded guilty under seal to the federal charge of mail fraud on April 6, 2018. Whitehurst faces a maximum sentence of 30 years in federal prison for conspiracy to commit bank fraud. Judge Chasanow has not scheduled a date for Whitehurst’s sentencing.

United States Attorney Robert K. Hur commended the FHFA-OIG, Mid-Atlantic Region; FDIC/OIG; SIGTARP; and SBA/OIG for their work in the investigation. Mr. Hur thanked Assistant U.S. Attorneys Martin J. Clarke and Harry M. Gruber, who are prosecuting the case

Michael Scott Leslie, 57, Boulder, Colorado, pleaded guilty today to federal bank fraud and aggravated identity theft charges.

According to the stipulated facts contained in Leslie’s plea agreement, Leslie owned, operated, or otherwise had an interest in several business entities, some of which were operated out of Colorado.  These entities were involved in or affiliated with financing or originating residential mortgage loans.  Through these business entities, Leslie sold residential mortgage loans to investors, including an FDIC-insured bank in Texas (“the victim bank”).

Between October 2015 and October 2017, Leslie devised and executed a scheme to defraud the victim bank by selling it 144 fraudulent residential mortgage loans valued at $31,908,806.88.  These loans were purportedly originated by one of Leslie’s companies, Montage Mortgage, and “closed” by Snowberry, which earned fees for the closing.  The loans were then presented and sold to the victim bank until Montage identified a final investor.  For these 144 fraudulent loans, that final investor was Mortgage Capital Management (MCM)

Leslie never disclosed to the victim bank that he operated MCM and Snowberry, or the fact that sales to investor MCM, even if they had been real, were not arms-length transactions.

The 144 residential mortgage loans sold to the victim bank were not, in fact, real loans.  The borrowers listed on these 144 fraudulent loans were real individuals, but they had no idea that their identities had been used as part of the sale of the fraudulent loans. The defendant had access to their personal identifying information in one of two primary ways:  (1) the borrowers had used Montage for legitimate residential real estate transactions which were properly executed and closed, or (2) the borrowers had been solicited by Montage about refinancing their existing loans.  In the case of refinance transactions, Montage secured permission from the borrowers to request credit scores and history from the major credit agencies.  After receipt of those credit scores, Montage often told these would-be refinance borrowers that they did not qualify for a refinance.  Leslie then recycled the borrowers’ information, obtained through prior legitimate transactions or attempted refinances, to create and sell nearly $32 million of fraudulent loan packages.

To execute this scheme, Leslie forged signatures on closing documents and fabricated and altered credit reports as well as title documents, often by using the names of legitimate companies.  The fraudulent real estate transactions were never filed with the respective counties in which the properties were located, there were no closings, and no liens were ever recorded.  Through numerous bank accounts for the various business entities and his personal accounts, the defendant used money in a Ponzi-like fashion from prior fraudulent loans sold to the victim bank to fund future fraudulent loans.  This complex flow of money continued until the defendant’s fraud was detected.  When the fraud was discovered, the victim bank still had 12 fraudulent loans, valued at $3,887,505.93, on its books that it could not, given that the loans did not exist, sell to any other legitimate third-party investor.

Leslie appeared remotely on a $50,000 unsecured bond, which was continued at the hearing’s conclusion.  The Denver office of the FBI, and the Offices of the Inspector General for both the Department of Housing and Urban Development (HUD) and the Federal Deposit Insurance Corporation (FDIC) joined in today’s announcement.

United States Attorney Jason R. Dunn made the announcement.

Chief U.S. District Court Judge Philip A. Brimmer presided over the change of plea hearing today, July 31, 2020.  Leslie was first charged by information on June 5, 2020.  This case was investigated by the Denver office of the FBI, and the Offices of the Inspector General for both the Housing and Urban Development and the Federal Deposit Insurance Corporation.  The defendant was prosecuted by Assistant U.S. Attorneys Hetal J. Doshi and Jeremy Sibert.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the District of Colorado.  Related court documents can be found on PACER by searching for Case Number 20-cr-171.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at

Barry Wayne Plunkett Jr., 60, and Nancy Plunkett, 55, both of Hyannis Port, Massachusetts, a former Massachusetts attorney and his wife were indicted today in federal court in Boston in connection with various mortgage fraud schemes.

According to the indictment, until he was disbarred in October 2017, Barry Wayne Plunkett Jr. owned and operated the Plunkett Law Firm where his wife, Nancy Plunkett, was his office assistant and paralegal.

The indictment alleges that the defendants engaged in several bank fraud schemes. In one scheme, from September 2012 to July 2016, the defendants defrauded six mortgage lenders and 14 homeowners for whom the Plunkett Law Firm handled the closings for new mortgage loans to refinance residential properties. The defendants informed the mortgage lenders that pre-existing mortgages were paid off from the new loan proceeds when, in fact, the Plunketts intentionally failed to pay off the prior liens and instead converted more than $900,000 in payoff funds for their own purposes.

In other bank fraud schemes – between April 2015 and March 2018 – it is alleged that the Plunketts fraudulently used various names, entities and false documents to obtain three successive mortgage loans on their home in Hyannis Port, Massachusetts in amounts of $412,000, $470,000 and $1.2 million. The defendants pledged as collateral a property in Hyannis Port that was held in a family trust for which Barry Wayne Plunkett Jr. was one of three beneficiaries. Both defendants participated in providing false documents to the lenders, including false title reports and other records to falsely represent that the property was free and clear of existing mortgage liens and forged documents in the names of other people. The defendants also allegedly made misrepresentations to a lender that Nancy Plunkett was a single woman living in Wellesley who was purchasing the property in her maiden name as a business investment when, in fact, the defendants had been married since 2014 and the property was their residence.

Both were were indicted on five counts of bank fraud and one count of aggravated identity theft. Barry Wayne Plunkett Jr. was also charged with one count of tax evasion.

The charge of bank fraud provides for a sentence of up to 30 years in prison, five years of supervised release and a fine of $250,000. The charge of tax evasion provides for a sentence of up to five years in prison, three years of supervised release and a fine of $250,000.  The charge of aggravated identity theft provides for a mandatory two-year sentence to be served consecutively to any other sentence imposed. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.


United States Attorney Andrew E. Lelling; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston made the announcement today. Assistant U.S. Attorney Victor A. Wild of Lelling’s Securities, Financial & Cyber Fraud Unit is prosecuting the case.

David Daughtrey, 60, El Cajon, California, pleaded guilty in federal court today to bank fraud and tax evasion charges, admitting that over the course of several years he evaded taxes by failing to report $498,612 of income to the IRS, and also orchestrated an illegal scheme to fraudulently obtain a mortgage for his $1.8 million residence using a third party.

Daughtrey admitted that from July 2006 until April 2016, he conspired with others to commit bank fraud and tax evasion. As part of the bank fraud scheme, Daughtrey directed another individual to submit a mortgage application to Wells Fargo to purchase a $1.8 million five-bedroom residence, and to falsely claim that the funds used as down payment belonged to the third party and the residence would be used by the third party.  In reality, Daughtrey provided the funds, and the home was intended to be Daughtrey’s primary residence. Daughtrey made monthly mortgage payments of approximately $8,000 for his residence, but continued to represent to the bank that the third party owned the house.  Daughtrey later submitted a false hardship letter on behalf of the third party in an effort to get the bank to modify the terms of the loan on the home.  As part of the plea agreement, Daughtrey admitted he was the true owner of the residence at all relevant times, and promised to make a good faith effort to transfer the legal ownership of the home into his own name.

Daughtrey also admitted as part his plea that over several years, he and his spouse (who is not charged in the case) conspired to commit tax evasion by filing tax returns listing substantially less income than Daughtrey actually earned.  Daughtrey’s tax return for the year 2012 omitted at least $498,612 in income.  Daughtrey failed to report his total income in tax years 2013, 2014, and 2015, and did not file timely tax returns for subsequent years.  According to the plea agreement, the resulting tax loss to the IRS for the years 2012-2014 was $456,536.   Daughtrey agreed to pay $1,016,457.91 in restitution to the IRS, which includes the total tax loss plus penalties and interest.

As part of his plea agreement, David Daughtrey also agreed to pay over $1 million in restitution to the Internal Revenue Service. He is scheduled to be sentenced on November 16, 2020, before U.S. District Judge Larry A. Burns.

People who cheat on their taxes are cheating all other law-abiding tax payers,” said U.S. Attorney Robert Brewer. “Mr. Daughtrey blatantly disregarded his tax obligations for years.  The defendant not only abused the tax system for his own financial benefit, but conspired to commit bank fraud in order to maintain this lifestyle.” Brewer commended the excellent work of prosecutor Oleksandra Johnson and FBI and IRS agents.

The FBI is dedicated to ensuring that white collar crimes are uncovered and prosecuted,” stated FBI Acting Special Agent in Charge Omer Meisel. “Today, David Daughtrey has admitted to mortgage fraud and tax evasion.  This case illustrates that the FBI will continue to investigate those individuals that engage in fraudulent financial schemes that cause harm to our banking industry and defraud the government of tax revenue.

Our Nation’s tax system funds critical infrastructures and vital programs, including supporting our citizens and small businesses during the ongoing pandemic,” Ryan L. Korner, Special Agent in Charge, IRS Criminal Investigation. “Honest Americans’ compliance with the tax laws is imperative. Rather than pay his fair share, David Daughtrey chose to live lavishly, while intentionally failing to report his true income and evading the payment of over $400,000 in taxes.  Today’s guilty plea demonstrates that the IRS will diligently continue our important enforcement efforts despite the ongoing challenges posed by Covid-19.  We will work alongside our law enforcement partners in a collective effort to enforce the law and ensure the public trust.”


Conspiracy to Commit Bank Fraud and Tax Evasion, 18 U.S.C. § 371 (count 1); and

Making a False Tax Return, 26 U.S.C. § 7206(1) (count 2).

Maximum penalty:

Five years’ imprisonment and $250,000 fine (count 1)

Three years’ imprisonment and a maximum fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greatest (count 2)


Federal Bureau of Investigation

Internal Revenue Service


Ginger Lynn Cunningham, 39, formerly of Hendersonville, North Carolina and currently residing in Brevard, North Carolina was sentenced yesterday, for selling fake title insurance policies.

According to information contained in filed court documents and presented in court during Cunningham’s sentencing hearing, Cunningham owned and operated Blue Ridge Title Company, an independent title insurance agency located in Buncombe County, North Carolina. Beginning in February 2015, Cunningham became an authorized independent agent for Commonwealth Land Title Insurance Company (Commonwealth).  As an authorized agent, Cunningham’s title agency sold title insurance policies underwritten by Commonwealth and collected premium payments during real estate closings.  Under the agreement with Commonwealth, Cunningham’s Blue Ridge Title Company would keep 80% of the premium payments, and the remaining 20% would be sent to Commonwealth. On or about March 21, 2016, Commonwealth terminated their agreement with Blue Ridge Title Company, because Cunningham failed to submit premium payments as required to Commonwealth.  At the time of termination, Blue Ridge Title Company owed Commonwealth in excess of $25,000 in premium payments.

According to court documents, from March 2016 until October 2017, Cunningham continued to represent herself and Blue Ridge Title Company to be an independent agent of Commonwealth, despite knowing that she no longer had any relationship with Commonwealth, and continued to sell fictitious title insurance policies and collect premium payments. The buyers of these bogus title insurance policies did not know that they were not underwritten by any insurance provider, and thus had no value.  Court records show that Cunningham further deceived her customers by drafting official looking, but fictitious, policy documents that bore the name of Commonwealth Land Title Insurance Company and fabricated policy numbers.  Cunningham kept 100% of the premium payments associated with these worthless policy sales.  As court records show, during the relevant time period, Cunningham sold at least 973 counterfeit title insurance policies and received at least $412,344 in premiums for the bogus policies. On October 28, 2019, Cunningham pleaded guilty wire fraud.

The announcement was made by Andrew Murray, U.S. Attorney for the Western District of North Carolina.

In addition to the prison term imposed, Cunningham was ordered to serve three years under court supervision and to pay $412,344 as restitution.

In making today’s announcement U.S. Attorney Murray commended the U.S. Department of Housing and Urban Development, Office of Inspector General, the Federal Housing Finance Agency, Office of Inspector General, and the North Carolina Department of Insurance for their investigation of this case.

Assistant United States Attorney Don Gast, of the U.S. Attorney’s Office in Asheville, prosecuted the case for the United States.

Wesley T. Bishop, 52, New Orleans, Louisiana was sentenced to four years of probation for making a false statement.

Bishop admitted to knowingly and willfully making a false, material statement to the United States Department of Housing and Urban Development (“HUD”) in connection with rental property that he owned.

As explained by FBI New Orleans Special Agent in Charge Bryan Vorndran, “Former State Senator Bishop made false statements on HUD paperwork which resulted in Bishop receiving a forgivable $188,000 loan under the “road home” program.”

Pursuant to the plea agreement, Bishop has agreed to pay restitution of $188,000 to the State of Louisiana, Division of Administration, Office of Community Development, which administers the subject Small Rental Property Program on behalf of HUD.  In addition to probation, Bishop has been ordered to pay a $100.00 special assessment fee.

U.S. Attorney Peter G. Strasser made the announcement.

U.S. Attorney Strasser praised the work and tireless efforts of the HUD Office of Inspector General and the FBI in investigating, and of Assistant United States Attorney Andre J. Lagarde in prosecuting this matter.

Willis Edwards III, 49, formerly of East Orange, New Jersey, and currently of Lithonia, Georgia, the former acting business administrator for the Township of Orange, New Jersey, has been charged in a 28-count indictment with conspiracy, bribe-taking, money and property fraud, federal tax fraud, and making false statements in connection with a mortgage.

According to documents filed in this case:

In January 2015, Edwards had his friend, Franklyn Ore, from Urban Partners LLC (Urban Partners), using cash provided by Edwards, funnel to himself a stream of concealed kickbacks in exchange for Edwards’ official action as an Orange public official and assistance in the affairs of Orange and in violation of his duties in connection with:

  • A Saturday literacy program for which Orange and the Orange Public Library were awarded a $50,000 Community Development Block Grant, funded by the U.S. Department of Housing and Urban Development (HUD) and administered by Essex County, to provide tutoring services for low and moderate-income families (the Saturday Literacy Program);
  • A project for which an urban planning company located in Montclair, New Jersey, had received a one-year, $150,000 contract from Orange to provide professional economic planning services to analyze the conditions within the Central Orange Redevelopment Area (the “redevelopment project”); and
  • A project to acquire the Orange YWCA building and develop it into a community recreation center.

Making False Statements in Connection with a Mortgage

In 2014, Edwards also made false statements to obtain mortgage relief on a $248,000 30-year mortgage loan that he obtained in 2005 to purchase a residence in East Orange, New Jersey. As of February 11, 2014, Edwards had fallen substantially in arrears on his mortgage payments. On April 7, 2014, Edwards submitted a completed Request for Mortgage Assistance form to the mortgage servicer. Edwards disclosed that he was employed by Orange and falsely indicated that he did not have a second employer, when, at the time, he also was employed by a New Jersey County College at an annual salary of approximately $45,000. On October 8, 2014, Edwards and the mortgage servicer entered into a Home Affordable Modification Agreement. In reliance upon false representations made by Edwards, the mortgage servicer provided the following benefits, among others, to Edwards: (1) $95,590 of Edwards’s debt was forgiven between July 2015 and July 2017, and (2) the real estate property was taken out of foreclosure.

The Saturday Literacy Program Fraud and Kickbacks

Despite knowing that Urban Partners did not provide any services to the library in connection with the Saturday Literacy Program, Edwards caused false and fraudulent vouchers to be submitted in March 2015 and in May 2015 to Essex County seeking Saturday literacy grant funds for expenses purportedly paid to Urban Partners. In support of the fraudulent vouchers, Edwards had phony documents submitted to Essex County, including: (1) a sham contract between Urban Partners and the library, backdated to over six months before Urban Partners had been formed, (2) false statistical data about the children who supposedly attended the literacy sessions, (3) fake Urban Partners invoices, and (4) backdated library checks payable to Urban Partners that had not been negotiated when submitted to Essex County to give the false impression that the Library had paid Urban Partners, when it had not done so.

Between April 2015 and June 2015, Essex County provided the Library with $50,000 in HUD funds for the Saturday Literacy Program. Between May 2015 and August 2015, Edwards caused the library to pay Urban Partners approximately $36,000, despite knowing that Urban Partners had not provided the library with any services in connection with the Saturday Literacy Program. Edwards received kickbacks from Ore from the money paid to Urban Partners by the library. At Edwards’s direction, Ore also provided a portion of the proceeds from the library to an associate of Edwards. Ore spent the remaining proceeds for his own personal benefit.

The Redevelopment Project Fraud and Kickbacks

Edwards used his influence as an Orange public official to arrange for the planning company to hire Urban Partners after the planning company had received its contract with Orange. Ore provided services to the Planning Committee and, between August 2015 and February 2016, the planning company, which was receiving payments from Orange, paid Urban Partners $33,220. Edwards received kickbacks from Ore from the money that the planning company paid to Urban Partners.

The YWCA Project Fraud and Kickback

In December 2015, aware that his resignation as an Orange public official would become effective on December 31, 2015, Edwards took further steps to use his position for corrupt and fraudulent purposes. Edwards advised Ore that Edwards had access to Orange discretionary funds and wanted to use them by the end of the year. At Edwards’s instruction, Ore generated and submitted a fraudulent invoice from Urban Partners to Orange, billing Orange $16,800 for services purportedly related to the YWCA Project. Edwards, knowing that no services has been rendered, approved the issuance of a purchase order and Orange paid Urban Partners $16,800.  On December 30, 2015, Edwards received a substantial amount of the $16,800 in a kickback from Ore.

The Plagiarism Scheme

From June 2015 to June 2016, Edwards duped Orange into making payments to a consultant, which were, at least in part, for academic papers that the consultant arranged to have written for Edwards. Edwards, who was enrolled in a graduate program at a university in New Jersey, plagiarized the papers that Orange paid for and passed them off as his own work. Between December 2015 and March 2016, with Edwards’s approval, the consultant submitted three fraudulent invoices to Orange calling for payments of $12,000, $16,000, and $10,000 for purported professional services. Orange paid the money to the consultant and Edwards received from the consultant academic papers that had been written for him. On June 20, 2016, Edwards submitted several papers which were virtually identical to the papers that he had received from the consultant. In emails to the professors, to which the papers were attached, Edwards asked the professors to grade the attached outstanding assignments so that he did “not receive a failing grade for all of the hard work that [he had] done.”

The Graduate School Payments Scheme

The indictment also charges Edwards with fraud in connection with funding his graduate studies. Between December 2015 and July 2016, Edwards engaged in a scheme to defraud Orange of $25,142 in payments to himself and University 1 related to Edwards’s graduate courses there and at another university in New Jersey through the use of a fraudulent approval memorandum. In February 2016, when Edwards was no longer an Orange public official, he dictated the following language to an employee in Orange’s Finance Department (Orange Employee 1) for use in a fraudulent approval memorandum addressed to Edwards: “As per the employee handbook, this memorandum serves as consent for you [Edwards] to enroll in the courses as discussed. Please forward the invoices to process for payment.” Edwards instructed Orange Employee 1 to backdate the memorandum to Aug. 17, 2015, to give the false impression that Edwards had received approval for Orange to pay for academic courses in which he had enrolled.

On February 10, 2016, at Edwards’s direction, Orange Employee 1 sent an email to a senior public official in the office of the Mayor of Orange (Orange Employee 2) containing a draft of the fraudulent approval memorandum. Orange Employee 2 later provided Orange Employee 1 with a final copy of the fraudulent approval memorandum on Orange letterhead, purportedly from the Mayor of Orange, addressed to Edwards, and backdated to August 17, 2015. It included the language that Edwards dictated to Orange Employee 1 and bore the stamp of the initials of the Mayor of Orange to give the false impression that the Mayor of Orange had approved Edwards’s reimbursement for the courses, when the Mayor of Orange had not done so.

Federal Tax Fraud

Edwards also caused a false 2015 federal tax return to be filed with the IRS. From January 2016 to April 15, 2016, Edwards conspired with his tax return preparer, Zenobia Williams, to defraud the United States and the IRS by claiming bogus labor expenses of $27,055 for his business, Natural Care Municipal Cleaning Services LLC (Natural Care), on that tax return. In addition to falsifying business expenses, Edwards also underreported Natural Care’s income. He reported $40,000 in gross receipts, when Natural Care actually received approximately $52,000 in payments from a New Jersey law firm and approximately $32,500 in payments from a local Board of Education. Edwards also did not report the ill-gotten gains that he obtained in 2015 in connection with the Saturday Literacy Program, the Redevelopment Project, and the YWCA Project.

The charges carry the following maximum potential penalties:

Offenses Charged Maximum Term of Imprisonment Maximum Fine
False statement concerning a mortgage 30 years $1,000,000
Conspiracy to commit wire fraud or wire fraud and mail fraud 20 years $250,000
Wire fraud 20 years $250,000
Mail fraud 20 years $250,000
Theft from a federally-funded local government 10 years $250,000
Bribery in connection with the business of a federally funded local government 10 years $250,000
Conspiracy to defraud the United States and the IRS Five years $250,000
Subscribing to a false tax return Three years $250,000

On January 13, 2020, Ore entered a guilty plea to an information charging offenses related to the Saturday Literacy Program, the Redevelopment Project, and the YWCA Project. On February 13, 2020, Timur Davis, the former Executive Director of the Orange Library, entered a guilty plea to an information charging an offense related to the Saturday Literacy Program and another HUD-funded program to replace an HVAC/Chiller unit at the Library. On December 30, 2019, Williams entered a guilty plea to conspiring to defraud the United States and the IRS.

Edwards was charged with 14 counts of wire fraud, two counts of bribery in connection with the business of a federally funded local government, two counts of theft from a federally funded local government, two counts of mail fraud, two counts of false statements concerning a mortgage, one count of bribery in connection with the business of a federally funded local government and organization, one count of theft from a federally funded local government and organization, one count of conspiracy to commit wire fraud, one count of conspiracy to commit wire fraud and mail fraud, one count of conspiracy to defraud the United States and the IRS, and one count of filing a false tax return. A date for Edwards’ arraignment has not yet been scheduled.

U.S. Attorney Craig Carpenito made the announcement.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Joe Denahan in Newark; special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorneys Cari Fais and J Fortier Imbert of the U.S. Attorney’s Office’s Special Prosecutions Division.

The charges and allegations in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

Blanca A. Medina, 54, Manalapan, New Jersey, pleaded guilty today, admitting her role in a scheme to defraud a financial institution of hundreds of thousands of dollars.

According to documents filed in this case and statements made in court:

From 2015 to 2018, Medina conspired with others to fraudulently obtain mortgage loans from “Mortgage Lender A” in Monmouth County to finance the purchase of properties by unqualified buyers. Applicants for mortgage loans are required to list their assets and income on their mortgage loan applications, and mortgage lenders rely on those applications when deciding whether to issue mortgage loans.

Medina, a former loan officer for Mortgage Lender A, admitted to participating in a conspiracy in which she knowingly caused completed mortgage loan applications that contained multiple misrepresentations of material facts regarding the buyers’ assets and income to be submitted to Mortgage Lender A. A conspirator provided Medina with false and fraudulent documents for potential borrowers including false and fraudulent lease agreements, bank statements, and a gift check and gift letter. Based on these lies, Mortgage Lender A issued mortgage loans to unqualified buyers, which caused Mortgage Lender A hundreds of thousands of dollars in losses.

The conspiracy charge to which Medina pleaded guilty carries a maximum of 30 years in prison and a $1 million fine. Sentencing is scheduled for October 20, 2020.

U.S. Attorney Craig Carpenito made the announcement.

Medina was charged before U.S. District Judge Stanley R. Chesler in Newark federal court to a one-count information charging her with conspiracy to commit bank fraud.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Acting Special Agent in Charge Douglas Korneski in Newark, and Special Agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Jonathan Fayer of the Economic Crimes Unit of the U.S. Attorney’s Office, and Special Assistant U.S. Attorney Charlie Divine of the Federal Housing Finance Agency, Office of Inspector General.