Clint Rogers, 37, Scottsdale, Arizona, and Angela Rogers, 31, Scottsdale, a pastor and his wife, as well as Shannon Kato, 40, Sedona, Arizona; Ernest Babbini, 55, Scottsdale; and Drew Hull, 30, Prescott, Arizona, have been indicted for alleged mortgage fraud crimes. Clint Rogers, Angela Rogers, and Shannon Kato have been arrested, and Ernest Babbini and Drew Hull have been served with a summons to appear in federal court.
The defendants are charged for their involvement in multi-million-dollar mortgage fraud conspiracies. Specifically, the defendants fraudulently obtained millions in loans and “cash back” loan proceeds. The defendants are charged with various counts of conspiracy, conspiracy to commit wire fraud, wire fraud, aggravated identity theft, money laundering, and conspiracy to commit transactional money laundering.
The 13-count indictment alleges that the defendants submitted false loan applications to banks and other lending institutions to buy numerous residential properties in a short period of time, lying about the borrowers’ income and liabilities in order to get financing of more than $5.5 million. Most of the homes referenced in the indictment are in Scottsdale, Arizona. The indictment also alleges that the defendants profited from the scheme by artificially increasing the sale prices of the properties and then directing portions of the loan proceeds back to themselves for their own personal use, while concealing this information from the lenders. The indictment alleges over $2.5 million in loan proceeds were directed back to the defendants during a single five-month period.
A conviction for conspiracy carries a maximum penalty of five years of imprisonment, a $250,000 fine, or both. A conviction for conspiracy to commit wire fraud and wire fraud carries a maximum penalty of 20 years in prison, a $250,000 fine, or both. A conviction for money laundering has a maximum penalty of 20 years of imprisonment, a $500,000 fine, or both. A conviction for conspiracy to commit transactional money laundering carries a maximum penalty of 10 years in prison and a $250,000 fine. A conviction for aggravated identity theft carries a minimum sentence of two years that must be served consecutive to the ultimate sentence imposed relating to the wire fraud or conspiracy to commit wire fraud charges.
An indictment is simply the method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.
U.S. Attorney Dennis Burke announced the indictment.
The investigation preceding the indictment in U.S. v. Rogers et al. was conducted by the Internal Revenue Service – Criminal Investigations and the Federal Bureau of Investigation. The prosecution is being handled by James R. Knapp, Assistant U.S. Attorney, District of Arizona, Phoenix.