Clifford McCall, 48, Lanham, Maryland, was sentenced by U.S. District Judge Roger W. Titus to four years in prison followed by five years of supervised release. His daughter, Chandra Jones, 31, Lanham, Maryland, to 33 months in prison followed by five years of supervised release. Each were sentenced for their roles in a conspiracy to commit mail and wire fraud in connection with a mortgage fraud scheme that falsely promised to help homeowners facing foreclosure keep their homes and repair their damaged credit. Judge Titus also entered judgements ordering McCall to pay restitution of $2,462,107.85 and ordering Jones to pay restitution of $3,879,093.58.
According to McCall’s plea agreement, McCall was president of Burroughs & Smythe Financial Services, Inc., based in Lanham, Maryland, and a director of the Fordham & Fordham Investment Group, Ltd., a foreclosure consulting and credit servicing business based in Lanham and Greenbelt, Maryland. These companies, which McCall and others incorporated, assisted the Metropolitan Money Store, located in Lanham, Maryland, in offering foreclosure consultation and credit services to financially distressed homeowners.
Beginning in September 2004, McCall conspired with others in a scheme to fraudulently promise to help homeowners, who had substantial equity in their homes but were facing foreclosure because of their inability to make monthly mortgage payments, avoid foreclosure and repair their damaged credit. The homeowners were directed to allow title to their homes to be put in the names of third party purchasers (the straw buyers) for a year, during which time Metropolitan Money Store promised to improve the homeowners’ credit ratings, help them obtain more favorable mortgages, and eventually return title to their homes to them. The homeowners were told that the equity withdrawn from the properties would be used to pay the mortgage and expenses on their homes and to repair their credit. The straw buyers were paid $10,000 to participate in the scheme.
Using the homeowners’ properties, the conspirators applied for mortgages to extract the maximum available equity from the homes. They prepared and submitted fraudulent loan applications to mortgage lenders to obtain fraudulently inflated loans on the target properties in the straw buyers’ names. At settlements, the conspirators imposed numerous fees and required “seller contributions” which were far in excess of industry standards; they imposed fees for services which were not performed, disclosed or explained to the homeowners; and they transferred the sale proceeds out of the escrow accounts into the conspirators’ business and personal bank accounts and converted a substantial portion of those funds to their personal use.
McCall obtained voluminous cashier’s checks in the names of straw buyers and Metropolitan Money Store employees to carry out the scheme. McCall also agreed to act as a straw buyer and secure a mortgage loan in his own name for property which was located in Lanham, and in return, was paid $10,000. McCall made false statements as to personal and financial information on settlement documents.
As a result of this scheme, McCall fraudulently obtained and used for his personal benefit at least $2,462,107.85 through bank and credit card accounts from 2004 to 2007.
According to Jones‘s plea agreement, Jones was hired in July 2005 to work as a loan processor at Metropolitan Money Store and shortly thereafter participated in the fraud scheme. In November 2005, she also began to work at Fordham & Fordham Investment Group, Ltd. (“F&F“). Jones was responsible for paying the mortgages on foreclosure reversal program properties and assisting program participants with repairing their credit. Jones was later made vice-president of F&F and a director of Burroughs & Smythe Financial Services, Inc. Jones was not licensed to provide credit repair services and had not received any training related to the mortgage industry, credit repair, or financial services.
During the course of the conspiracy, Jones placed $788,978.30 from F&F‘s bank accounts into her personal bank accounts. For example, on October 25, 2006, Jones wire transferred $20,000 drawn on one of F&F‘s accounts and deposited the funds into her personal bank account. At the direction of co-conspirators, Jones transferred funds from the F&F accounts to pay the personal expenses of co-conspirators and observed co-conspirators using funds from the F&F accounts for their personal benefit.
Jones also agreed to serve as a straw buyer for two properties, and secure mortgage loans in her own name to do so, because she had a good credit history. Jones was paid $3,600 for serving as a straw buyer for a property in Accokeek, Maryland and $5,000 for serving as a straw buyer for a property in Bladensburg, Maryland. In purchasing the properties, Jones made false statements as to personal and financial information on settlement documents.
As a result of this scheme, the total loss attributable to Jones, including the estimated losses to the mortgage lenders, is $4,189,283.86.
Ten defendants, including Jones‘s mother, a lawyer, mortgage broker, real estate agent, loan processor and company officers have pleaded guilty in this scheme. Kurt Fordham, 39, Fort Washington, Maryland was sentenced on July 10, 2009 to 10 years in prison for his participation in the scheme. Fordham was personally responsible for over $13.5 million of losses to mortgage lenders and used over $800,000 of fraudulently obtained proceeds to pay for his wedding. On September 14, 2009, Judge Titus sentenced Richard Allison, 38, Camp Springs, Maryland, an attorney and employee of the U.S. Census Bureau who provided legal services to MMS, F&F and Burroughs & Smythe, to 18 months in prison; and Carlisha Dixon, 32, Hyattsville, Maryland to five months in prison and five months home detention. Judge Titus also entered an order of restitution against Dixon of $180,000 and deferred restitution for Allison pending a hearing on October 7th to determine the amount and allocation of restitution among the victims. The remaining defendants are scheduled to be sentenced within the next two months.
“The IRS-Criminal Investigation has the financial investigators and expertise that are critical to locating the money and prosecuting the offenders,” stated C. André Martin, Internal Revenue Service-Criminal Investigation Special Agent in Charge. “The IRS-Criminal Investigation is united with the rest of the law enforcement community in our resolve to financially disrupt those that commit crimes against our society and economy.”
United States Attorney for the District of Maryland Rod J. Rosenstein announced the sentences and thanked the Federal Bureau of Investigation, U.S. Secret Service, Internal Revenue Service – Criminal Investigation and the Maryland Department of Labor, Licensing and Regulation’s Division of Financial Regulation Investigative Unit for their investigative work. Mr. Rosenstein commended Assistant United States Attorneys James A. Crowell IV and Christen Sproule, who are prosecuting the case.