Wilbur Ballesteros, 33, Lanham, Maryland, pleaded guilty to 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.
According to his plea agreement, in May 2005, co-defendants Joy Jackson and Jennifer McCall incorporated Metropolitan Money Store, located in Lanham, Maryland, which offered foreclosure consultation and credit services to financially distressed homeowners.
From September 2004 to June 2007, Ballesteros conspired with others 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 (MMS) 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 The homeowners were told that the equity withdrawn from the properties would be used to pay the mortgage and expenses on their homes and to repair their credit.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 up to $10,000 to participate in the scheme and allow the properties to be put in their names.
Using the homeowners’ properties, the conspirators applied for mortgages to extract the maximum available equity from the homes, and prepared and submitted fraudulent loan applications to mortgage lenders to obtain 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.
In order to facilitate the fraudulent loans, Ballesteros, a licensed real estate agent, served as a closing agent on more than 60 straw buyer properties, securing title insurance, facilitating the real estate settlements and submitting fraudulent closing documentation to the lenders, as instructed by Jackson, McCall and other MMS personnel. Ballesteros often created multiple settlement statements or altered the settlement statements for some properties to disburse the homeowners’ proceeds directly to MMS employees and himself. In order to disguise some of the payments to himself, Ballesteros created a company called WB & Associates, LLC and crafted settlement statements which provided for payments to this company, which Ballesteros then disbursed to himself and other conspirators.
In addition to causing the equity proceeds to be sent to Jackson, McCall and companies under their control, Ballesteros also caused wire transfers and checks to be drawn from the equity of some properties to be sent to him or to WB & Associates.
Further, Jackson and McCall paid Ballesteros more than $100,000 in kickbacks to facilitate loan closings. Initially, Jackson paid Ballesteros up to $3,000 in cash for closing loans and eventually paid him by check and cashier’s check. Over time, Jackson lowered the amount of kickbacks to Ballesteros to at least $1,000 for closing loans. In return, Ballesteros processed real estate closings for MMS quickly and as requested by Jackson, McCall or other MMS personnel. Moreover, when Jackson and McCall requested, Ballesteros permitted MMS employees to close at least 20 loans without him or any other closing agent being present. Thereafter, Ballesteros prepared the documents, including certifying the straw buyers’ and homeowners’ presence at the loan closings, and then submitted the completed loan paperwork to the lenders causing them to release the loan proceeds to a title company.
The total loss attributable to Ballesteros’s conduct in the scheme, including the estimated losses to the mortgage lenders, is $16,859,950.
Ballesteros faces a maximum sentence of 30 years in prison and a $1 million fine for the conspiracy. U.S. District Judge Roger W. Titus scheduled sentencing for December 7, 2009 at 9:00 a.m. As part of his plea, Ballesteros has agreed to pay restitution for the full amount of the victims’ losses.
Ballesteros is the ninth defendant to plead guilty in the Metropolitan Money Store mortgage fraud scheme. Eight other defendants have pleaded guilty to the conspiracy and are facing a maximum sentencing of 30 years in prison: Joy Jackson, 41, President of Metropolitan Money Store, and Jennifer McCall, 47, both of Ft. Washington, Maryland, a chief executive officer of Metropolitan Money Store and owner of JC and JC Investments LLC; Jackson’s husband Kurt Fordham, 39, Ft. Washington, Maryland, president of Fordham & Fordham Investment Group, Ltd. (F&F) and a director of F&F and Burroughs & Smythe Financial Services, Inc. (B&S) Katisha Fordham, 35, Washington, D.C., a loan processor at the Metropolitan Money Store; Richard Allison, 37, Camp Springs, Maryland, an attorney and employee of the U.S. Census Bureau; Clifford McCall, 47, Lanham, Maryland, president of Burroughs & Smythe Financial Services, Inc., based in Lanham and a director of the Fordham & Fordham Investment Group, Ltd., a foreclosure consulting and credit servicing business based in Lanham and Greenbelt, Maryland; Carlisha Dixon, 31, Hyattsville, Maryland, vice president and a director of Burroughs & Smythe Financial Services, Inc.; and Chandra Jones, 31, Lanham, Maryland, the daughter of co-defendants Jennifer and Clifford McCall.
“Real estate professionals who know that mortgage fraud is occurring are obligated to report it,” said U.S. Attorney Rod J. Rosenstein. “Wilbur Ballesteros was a licensed real estate agent who accepted kickbacks in return for his assistance in closing $16 million in fraudulent mortgage loans.“
United States Attorney for the District of Maryland Rod J. Rosenstein made the annoucement 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.