Brett Matheson, 46, pleaded guilty in federal court to conspiracy to commit wire fraud in a $50 million mortgage fraud scheme based in Phoenix, Arizona. Two others have also entered guilty pleas and are awaiting sentencing.
Matheson acknowledged in his guilty plea that as President and CEO of Maricopa Property Investment Solutions, Inc., he recruited straw buyers in real estate seminars. As previously reported by Mortgage Fraud Blog, from about January 2005 through September 2006, he facilitated the submission of mortgage loan applications for these unqualified straw buyers containing false information regarding employment, income, assets and the intent to occupy homes as their primary residence. In some cases, the loan application packages contained altered pay stubs, false bank statements, and bogus verifications of employment and deposit. Matheson personally obtained financing for the purchase of two properties using altered pay stubs and bogus verifications of employment. At closing, a portion of the seller proceeds were kicked back to an entity controlled by Matheson and his co-conspirators. The arrangement between Matheson‘s company and the “straw” buyers was concealed from the lenders. The kickbacks were often used on Matheson‘s personal expenses or to make down payments to qualify additional “straw” buyers for financing on other properties. In total, 52 properties were involved in the scheme with nearly $50 million in fraudulent loans. The losses to lenders approached $20 million.
The case against Matheson and his co-conspirators is based on an investigation conducted by the Internal Revenue Service’s Criminal Investigation Division and the Federal Bureau of Investigation.
“This guilty plea reminds us of the destructive role mortgage fraudsters played in the financial crisis that has impacted every Arizonian and the entire country,” said U.S. Attorney Dennis K. Burke. “Schemes like this have destroyed property values, crippled lending institutions, and ruined entire neighborhoods in our community. It has resulted in the loss of tax revenues and jobs. We will continue to investigate and prosecute those who have profited from mortgage fraud.”
“Mortgage fraud threatens the financial health of our communities. IRS Criminal Investigation and our law enforcement partners are committed to following the money trail to ensure those who engage in illegal activities such as Matheson are brought to justice,” said Dawn Mertz, Special Agent in Charge, Phoenix Field Office, Internal Revenue Service, Criminal Investigation Division.
A conviction for a single count of conspiracy to commit wire fraud is punishable by a maximum fine of $1 million a maximum term of imprisonment of 30 years, or both, and a term of supervised release of five years. In determining an actual sentence, Federal District Judge Neil V. Wake will consult the U.S. Sentencing Guidelines, which provide appropriate sentencing ranges. The judge, however, is not bound by those guidelines in determining a sentence.
Matheson‘s prosecution is part of an initiative called “Operation Stolen Dreams” in which dozens of defendants – including many real estate professionals – were indicted in the summer of 2010. To date, 27 of those indicted have been convicted through guilty pleas.
The investigation in this case was conducted by the Internal Revenue Service, Criminal Investigations Division and the FBI. The prosecution is being handled by Kevin M. Rapp and Monica B. Klapper, Assistant U.S. Attorneys, District of Arizona, Phoenix.