Agent and 16 Others Indicted in Mortgage Fraud Ring

admin —  December 21, 2009 — 1 Comment

Charles E. Walker, 56, Linda F. Walker, 57, Springfield, Missouri, Lee Edward Walker, 34, Frankie R. Powell, 67, Republic, Missouri, Juan A. Johnson, 41, St. Louis, Missouri, Charles V. Pursley, 82, Tulsa, Oklahoma, James H. Powell, also known as “Jimmy,” 71, William Wagoner, 56, Steve Casarez, Jr., 32, Vincent Cantrell, 40, Eddie Lee Rohrs, 37, Christopher Forrester, 29, Robert C. Barnica, 35, Jess Kevin Cypret, 51, Linda D. Hanks, 38, Tammy R. Fedel, 53, and Laura Greer, 41, were charged in a 52-count indictment related to a nearly $11 million mortgage fraud scheme that involved more than two dozen residential properties. 

Charles Walker was the owner of Charles E. Walker Realty, Inc., a real estate company that listed, marketed and sold residential real estate in the Springfield area. Walker Realty also solicited and maintained a group of investors who purchased real estate solely or primarily for investment purposes. Some of these investors were also real estate agents who worked at Walker Realty, or mortgage brokers who also brokered mortgage transactions for clients of Walker Realty

Charles Walker’s wife, Linda Walker, and son, Lee Walker, were licensed real estate agents and investors at the firm. Frankie Powell, Forrester, Hanks, Fedel and Greer were also licensed realtors and investors at the firm. Wagoner and Casarez were mortgage brokers and investors at the firm. James Powell, Rohrs, Barnica and Cypret were also investors at the firm. Johnson was a mortgage broker. Cantrell and Pursley were real estate appraisers. 

The indictment charges each of the defendants with participating in a conspiracy to commit wire fraud and a conspiracy to commit money laundering, each conspiracy continuing from Nov. 1, 2004, to June 30, 2006. The indictment also charges various defendants with additional counts of wire fraud and money laundering.  

According to the indictment, Charles and Linda Walker, along with other co-conspirators, caused mortgage lenders in at least 26 fraudulent real estate transactions to transmit loan proceeds totaling approximately $10,944,023. As a result of the scheme, co-conspirators actually received approximately $4.3 million in proceeds. Most of the residential properties involved in the mortgage fraud scheme have gone into foreclosure. 

According to the indictment, co-defendants bought and re-sold residential real estate properties among themselves for increasingly inflated values. Walker Realty received a commission from many of these transactions, as did many of the real estate agents working for Walker Realty

Potential home buyers represented by Walker Realty were told they could receive substantial funds at the time of closing under the guise of “repair costs” or “remodeling,” the indictment says, which they could use for their personal benefit, if they agreed to purchase the homes at an inflated price. 

Defendants allegedly defrauded various mortgage lenders by artificially inflating the sales prices of homes they purchased, and submitting false loan applications to the lenders in support of their mortgage loan requests. According to the indictment, these loan applications typically contained inflated monthly income figures and incorrect listings of assets and liabilities for the borrowers, as well as falsely inflated sale prices for the homes being purchased. Many of the applications falsely reflected that the property was being purchased as the borrower’s primary residence, rather than for investment purposes. All of the loan applications failed to notify the lender that a portion of the loan proceeds would be funneled back to the borrower, and others, after closing under the guise of remodeling or repair costs, or for the borrower’s use in making mortgage payments on the property.

Mortgage brokers Wagoner, Casarez and Johnson allegedly facilitated the submission of the fraudulent loan applications to lenders for borrowers who could not qualify to purchase the homes at the artificially inflated prices. They allegedly prepared and submitted loan applications for these borrowers that contained false information concerning their actual income, assets, and liabilities, and concealed the fact that portions of the loan proceeds would be remitted to the borrower after closing. The borrowers signed and approved the loan applications for submission knowing they contained false representations and omissions of requested material facts. 

In some cases, the indictment says, Charles Walker and other Walker Realty agents and investors provided temporary loans to borrowers for down payments on the homes being purchased. They allegedly did so with the understanding that they would be reimbursed after closing from the purported “remodeling” or “repair” disbursements the borrower received from the purchase of that property, or from proceeds the borrower received from additional, future real estate purchases with Walker Realty. In those cases, the borrowers did not disclose the down payment loans to the lenders, but instead falsely reported the source of their down payment. 

Cantrell and Pursley allegedly submitted falsely-inflated appraisals for the real properties being purchased in relation to this scheme. These falsely-inflated appraisals were offered to support the inflated sales prices of the homes being purchased, and were relied upon by the lenders to support the mortgage loans. Cantrell allegedly conducted appraisals on 12 residential properties for Walker Realty in which he falsely inflated the property’s appraised value to support the artificially inflated sales price. Pursley allegedly conducted appraisals on 14 residential properties for Walker Realty in which he falsely inflated the property’s appraised value to support the artificially inflated sales price. 

The federal indictment also alleges that, included in the 26 fraudulent mortgages for which Charles and Linda Walker are charged: 

Lee Walker personally engaged in seven fraudulent real estate transactions, totaling approximately $3,080,229.

Frankie Powell personally engaged in nine fraudulent real estate transactions, totaling approximately $3,272,771.

James Powell personally engaged in eight fraudulent real estate transactions, totaling approximately $4,197,139.

Wagoner prepared and submitted nine loan applications for himself and on behalf of other borrowers, totaling approximately $2,578,531.

Casarez prepared and submitted five loan applications for himself and on behalf of other borrowers, totaling approximately $2,345,588.

Johnson prepared and submitted nine loan applications for himself and on behalf of other borrowers, totaling approximately $3,104,265.

Rohrs personally engaged in four separate real estate transactions, in which he bought and sold real estate through Walker Realty at artificially inflated prices, totaling approximately $2,416,919.

Forester personally engaged in one real estate transaction, in which he purchased and re-sold a piece of residential real estate through Walker Realty at an artificially inflated price, totaling approximately $1,501,595.

Barnica personally engaged in two separate real estate transactions, in which he bought and sold real estate through Walker Realty at artificially inflated prices, totaling approximately $1,006,015.

Cypret personally engaged in two separate real estate transactions, in which he bought and sold real estate through Walker Realty at artificially inflated prices, totaling approximately $536,096.

Hanks personally engaged in one real estate transaction, in which she purchased a piece of residential real estate from Lee Walker at an artificially inflated price. In exchange for her purchase, Hanks received $91,145 from Walker after closing, which she did not disclose to the mortgage lender.

Fedel purchased two pieces of residential real estate through Walker Realty at artificially inflated prices, totaling approximately $672,648. In exchange for her purchases, Fedel received after-closing payments from the sellers that she did not disclose to the mortgage lender.

Greer purchased, and later re-financed, a piece of residential real estate from her father, James Powell, at an artificially inflated price. In exchange for her purchase and after closing, Greer received $226,718 from James Powell that she did not disclose to the mortgage lender. 

The indictment also contains forfeiture allegations, which would require the defendants to forfeit to the government any property that was derived from the proceeds of the alleged offenses, or that was used to commit the alleged offenses, including a money judgment of $4,338,597, representing the amount of proceeds actually obtained by conspirators as a result of the alleged offenses. 

Matt J. Whitworth, United States Attorney for the Western District of Missouri cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence. 

This case is being prosecuted by Assistant U.S. Attorney Robyn L. McKee. It was investigated by the U.S. Secret Service and IRS-Criminal Investigation.

 

 

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One response to Agent and 16 Others Indicted in Mortgage Fraud Ring

  1. THATS WHAT ROB BARNICA GETS ๐Ÿ™‚

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