Archives For Georgia

Christopher Grooms, 41, Savannah, Georgia pled guilty to an Information charging him with a scheme to enrich himself by repeatedly borrowing money against the same pieces of property will go to prison for fraud.

As described in court documents and testimony, Grooms operated several real estate investment companies that acquired and resold real estate. From 2013 to 2018, Grooms devised a scheme in which one of his companies would purchase a property using borrowed funds, and he would then falsify documents to show that the lien against the property had been satisfied. He would then secure additional loans against the property, repeatedly filing fraudulent paperwork to show the property was unencumbered by liens.

Grooms used the scheme at least 24 times for nearly $3 million in fraudulent loans from multiple financial institutions. The properties used in the scheme were located in Georgia cities including Savannah, Hinesville, Glennville, Midway and Allenhurst.

Grooms was sentenced to 33 months in federal prison, ordered to pay $1,645,267.95 in restitution, and a forfeiture money judgment totaling $2,937,881.43, said David H. Estes, Acting U.S. Attorney for the Southern District of Georgia. After completion of his prison term, Grooms must serve four years of supervised release.

There is no parole in the federal system.

The Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG) is committed to holding accountable those who waste, steal, or abuse the resources of the government-sponsored enterprises regulated by FHFA.  We are proud to have partnered with the U.S. Attorney’s Office for the Southern District of Georgia in this case,” said Edwin S. Bonano, Special Agent-in-Charge, FHFA-OIG, Southeast Region.

This sentence should serve as a stark reminder that such greed as seen in this case comes with a bigger cost,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI recognizes the impact on the banking institution and will continue to dedicate investigative resources to target fraud in its many forms.”

Financial fraud temporarily enriches criminals at the long-term expense of legitimate businesses,” said Acting U.S. Attorney Estes. “As Christopher Grooms discovered, our law enforcement partners are adept at rooting out these schemes, and his ill-conceived investment in criminal activity is returning a dividend of time behind bars.

Committing high-level fraud will not be tolerated in Georgia,” said Georgia Bureau of Investigation (GBI) Director Vic Reynolds. “The GBI worked hard on this investigation with local and federal partners to bring this case to a successful prosecution.”

The case was investigated by the FBI, the Federal Housing Finance Agency Office of the Inspector General, the GBI, and the Tattnall County Sheriff’s Office, and prosecuted for the United States by Assistant U.S. Attorneys Tara M. Lyons and Asset Recovery Unit Chief Xavier A. Cunningham.

 

Eric Hill, 50, Tyrone, Georgia, Robert Kelske, 52, Smyrna, Georgia,  Fawziyyah Connor, 41, Tyrone, Georgia, Stephanie Hogan, 57, Norcross, Georgia, Jerod Little, 42, McDonough, Georgia, Renee Little, 33, McDonough, Georgia, Maurice Lawson, 36, Powder Springs, Georgia, Todd Taylor, 54, Fairburn, Georgia, Paige McDaniel, 49, Stockbridge, Georgia, Donald Fontenot, 52, Locust Grove, Georgia, and Anthony Richard, 44, Locust Grove, Georgia, have pleaded guilty to conspiracy to defraud the United States in a mortgage fraud scheme spanning more than four years and resulting in the approval of more than 100 mortgages based on fabricated documents and false information.

According to the charges and other information presented in court: The defendants participated in a conspiracy in which homebuyers and real estate agents submitted fraudulent loan applications to induce mortgage lenders to fund mortgages.

Listing agents Eric Hill and Robert Kelske represented a major nationwide homebuilder and helped more than 100 homebuyers who were looking to buy a home, but who were unqualified to obtain a mortgage, commit fraud.  The agents instructed the homebuyers as to what type of assets they needed to claim to have in the bank, and what type of employment and income they needed to submit in their mortgage applications.

Hill and Kelske then coordinated with multiple document fabricators, including defendants Fawziyyah Connor and Stephanie Hogan, who altered the homebuyers’ bank statements to inflate their assets and to create bank entries reflecting false direct deposits from an employer selected by the real estate agent.  The document fabricators also generated fake earnings statements that matched the direct deposit entries to make it appear that the homebuyer was employed, and earning income, from a fake employer.  Other participants in the scheme then acted as employment verifiers and responded to phone calls or emails from lenders to falsely verify the homebuyers’ employment.  Defendants Jerod Little, Renee Little, Maurice Lawson, Todd Taylor, Paige McDaniel and Donald Fontenot acted as employment verifiers.  Hill and Kelske coordinated the creation and submission of the false information so that the lies to the lenders were consistent.

In another aspect of the scheme, real estate agent Anthony Richard falsely claimed to represent homebuyers as their selling agent in order to receive commissions from the home sales.  In reality, Richard had never even met the homebuyers he claimed to represent.  To avoid detection, he often notified closing attorneys that he would be unable to attend the closing and sent wire instructions for the receipt of his commissions.  When Richard received his unearned commissions, he kicked back the majority of the commissions to Hill or Kelske for enabling him to be added to the deal, keeping a small share for his role in the scheme.

Many of the loans are insured by the Federal Housing Administration (FHA) resulting in claims being paid for mortgages that have defaulted.

These defendants brazenly manipulated the real estate lending process by using their knowledge of the system,” said Acting U.S. Attorney Kurt Erskine.  “Mortgage fraudsters threaten the soundness of the real estate market in our community and divert critical resources away from those borrowers who properly qualify for loans.  Rooting out bad actors who attempt to abuse the system for their own personal gain makes the mortgage lending system safer and fairer for everyone.

These defendants who dragged down our economy by using deception, will now be sentenced and forced to reimburse the victims of their conspiracy,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “The FBI is committed to combating such criminal activity to protect our citizens and the real estate market from predators who are most interested in pocketing money that they have no right to.”

These offenders engaged in blatant criminal acts with the sole purpose of enriching themselves at the cost of a federal housing program designed to assist millions of American homebuyers.  Their fraudulent undertaking strikes at the fiscal integrity of the FHA and we will work diligently in conjunction with our law enforcement partners to hold them accountable” said Wyatt Achord, Special Agent in Charge, HUD Office of Inspector General.

“The Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG) is committed to holding accountable those who waste, steal, or abuse the resources of the Government-Sponsored Enterprises regulated by FHFA.  We are proud to have partnered with the U.S. Attorney’s Office for the Northern District of Georgia in this case,” said Edwin S. Bonano, Special Agent-in-Charge, FHFA-OIG, Southeast Region.

These defendants have agreed to pay restitution to the victims of their conspiracy, including the Department of Housing and Urban Development, which insures many of the residential mortgages in the United States. Sentencing hearings have been set for these defendants before U.S. District Judge Mark H. Cohen.

A twelfth defendant, Cephus Chapman, 49, Warner Robins, Georgia is awaiting trial.  Members of the public are reminded that the indictment only contain charges.  The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.

This case is being investigated by the Federal Bureau of Investigation, Department of Housing and Urban Development Office of Inspector General, and Federal Housing Finance Agency Office of Inspector General.

Assistant U.S. Attorneys Alison Prout and Ryan Huschka are prosecuting the case.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.

 

Eric Hill, 50, Tyrone, Georgia (charged by Information); Robert Kelske, 52, Smyrna, Georgia; Fawziyyah Connor, 41, Tyrone, Georgia; Stephanie Hogan, 57, Norcross, Georgia; Jerod Little, 42, McDonough, Georgia; Renee Little, 33, McDonough, Georgia; Maurice Lawson, 36, Powder Springs, Georgia; Todd Taylor, 54,  Fairburn, Georgia; Paige McDaniel, 49, Stockbridge, Georgia; Donald Fontenot, 52, Locust Grove, Georgia (charged by Information); Anthony Richard, 44,  Locust Grove, Georgia; Cephus Chapman, 49, Warner Robins, Georgia, have been charged in a mortgage fraud scheme allegedly spanning more than four years and resulting in the approval of more than 100 mortgages based on fabricated documents and false information.

According to the indictment, and other information presented in court: The defendants participated in a scheme in which homebuyers and real estate agents submitted fraudulent loan applications to induce mortgage lenders to fund mortgages.  Listing agents Eric Hill and Robert Kelske represented a major nationwide homebuilder, and helped more than 100 homebuyers who were looking to buy a home, but who were unqualified to obtain a mortgage, commit fraud.  The agents instructed the homebuyers as to what type of assets they needed to claim to have in the bank, and what type of employment and income they needed to submit in their mortgage applications.

Hill and Kelske then coordinated with multiple document fabricators, including defendants Fawziyyah Connor and Stephanie Hogan, who altered the homebuyers’ bank statements to inflate the their assets and to create bank entries reflecting false direct deposits from an employer selected by the real estate agent.  The document fabricators also generated fake earnings statements that matched the direct deposit entries to make it appear that the homebuyer was employed, and earning income, from a fake employer.  Other participants in the scheme then acted as employment verifiers and responded to phone calls or emails from lenders to falsely verify the homebuyers’ employment.  Defendants Jerod Little, Renee Little, Maurice Lawson, Todd Taylor, Paige McDaniel and Donald Fontenot acted as employment verifiers.  Hill and Kelske coordinated the creation and submission of the false information so that the lies to the lenders were consistent.

In another aspect of the scheme, real estate agents Anthony Richard and Cephus Chapman falsely claimed to represent homebuyers as their selling agents in order to receive commissions from the home sales.  In reality, these real estate agents had never even met the homebuyers they claimed to represent.  To avoid detection, the agents often notified closing attorneys that they would not be available for the home closing, and sent wire instructions for the receipt of their commissions.  When these purported selling agents received their unearned commissions, they kicked back the majority of the commissions to Hill or Kelske for enabling them to be added to the deal, keeping a small share for their role in the scheme.

Many of the loans are insured by the Federal Housing Administration (FHA) resulting in claims being paid for mortgages that have gone through loan modification.

These defendants allegedly used their knowledge of the real estate lending process to manipulate the system for their own benefit,” said U.S. Attorney Byung J. “BJay” Pak.  “Mortgage fraudsters threaten the soundness of the real estate market in our community.  We will investigate and charge anyone who takes advantage of our mortgage lending system for their own personal gain.”

These charges represent the government’s commitment toward combating such alleged criminal activity,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “We will steadfastly protect American citizens and the real estate market from predators who drag down our economy by deceit to line their own pockets.”

What we have here is a group of mortgage industry professionals that have allegedly perpetrated a sophisticated mortgage fraud for profit scheme that was designed to enrich themselves at the expense of a federal housing program,” said Wyatt Achord, Special Agent in Charge, Office of the Inspector General, U.S. Department of Housing and Urban Development. “The efforts that brought forward these charges demonstrate that when law enforcement is made aware of such schemes, we will commit the necessary resources to make sure that fraudsters are brought to justice.”

As charged, the defendants engaged in a multiyear scheme to defraud Fannie Mae and Freddie Mac.  The Federal Housing Finance Agency Office of Inspector General (FHFA-OIG) will investigate and hold accountable those who seek to victimize these Government Sponsored Entities supervised and regulated by FHFA”, said FHFA-OIG Special Agent in-Charge Edwin Bonano.

Members of the public are reminded that the indictment and informations only contain charges.  The defendants are presumed innocent of the charges and it will be the government’s burden to prove the defendants’ guilt beyond a reasonable doubt at trial.

This case is being investigated by the Federal Bureau of Investigation, Department of Housing and Urban Development Office of Inspector General, and Federal Housing Finance Agency Office of Inspector General.

Assistant U.S. Attorney Alison Prout is prosecuting the case.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern

Carol Michaelson, 56, Dawsonville, Georgia, a formerly licensed real estate agent, pleaded guilty today to defrauding her clients by faking property sales, forging contracts and deeds, and then pocketing her victims’ money.

According to the charges and other information presented in court,  Michaelson operated a scheme to defraud her clients while acting as a real estate agent.  She pretended to arrange real estate purchases for her clients and received funds from them to complete the purchases, but then diverted the funds to her own personal use.  In furtherance of the scheme, she prepared fraudulent real estate contracts listing false owners, forged signatures on the contracts and other agreements, and filed fraudulent warranty deeds with forged signatures with the county clerk’s office.  Michaelson also sent emails to her victims impersonating closing attorneys, loan officers, and other financial and real estate personnel, to trick the victims into believing that the real estate transactions were legitimate and progressing.

Michaelson defrauded her victims in a variety of ways.  In some cases, she falsely informed victims that certain properties were for sale by their owners, when in fact they were not; and the true owners were unaware of Michaelson’s false representations.  In another instance, after Michaelson deceived a victim into believing that she had purchased properties for the victim, Michaelson created false tenant identities to deceive the victim into further believing that she had arranged for the properties to be rented.  Michaelson then sent rent checks to the victim, pretending to be the false tenants.  The victim did not know that he was not the true owner of the properties.  In yet another instance, after facilitating a real sale to a victim, Michaelson transferred ownership back to the bank, without the victim’s knowledge, and filed a fraudulent warranty deed with forged signatures in the county clerk’s office.

Michaelson stole over $1 million from her victims through her real estate scheme.

Michaelson was previously charged with forgery, theft by conversion, and false statements in Dawson County for defrauding real estate clients.  As a result, she lost her real estate license in 2014.  Even after surrendering her license, Michaelson continued to act as an unlicensed real estate agent and engage in fraudulent real estate transactions.  Sentencing has not yet been scheduled.

This defendant stole her clients’ hard-earned money by pretending to purchase properties for them, while pocketing their funds for her own personal use,” said U.S. Attorney Byung J. “BJay” Pak.  “She then tried to cover her tracks with fake sales agreements and forged deeds.  Michaelson is a repeat offender, having previously lost her real estate license for defrauding clients.”

This case demonstrates the commitment the Secret Service and our law enforcement partners have in aggressively pursuing those who defraud innocent victims,” said Steven R. Baisel, Special Agent in Charge of the U.S. Secret Service, Atlanta Field Office.  “This guilty plea should serve as a reminder to other like-minded individuals that we will protect our economic system and arrest criminals who violate public trust for personal gain.”

We are grateful to all the involved criminal justice agencies who worked so diligently to help close these cases. It is our continued desire that justice will be served in hopes of deterring these types of crimes,” said Dawson County Sheriff Jeff Johnson.

The U.S. Secret Service, the Dawson County Sheriff’s Office, and the Enotah Judicial Circuit District Attorney’s Office are investigating this case.

Assistant U.S. Attorney Stephen H. McClain, Chief of the Complex Frauds Section, is prosecuting the case.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.

 

Michelle Sylethia Jordan, a/k/a Michelle Harris and Michelle Welsh, 49; and her husband, Michael Paul Anthony Welsh, a/k/a Michael A. Welsh and Michael Paul S. Welsh, 45, both of Laurel, Maryland, were sentenced yesterday to 57 months and 46 months in federal prison, respectively, each followed by three years of supervise release, on conspiracy and wire fraud charges in connection with a foreclosure prevention fraud scheme.

According to the evidence presented at their eight-day trial, Jordan was chief executive officer and director of MJ Loan Auditor Group, LLC (MJLAG), a limited liability company registered and doing business in Maryland.  Welsh was president and chief executive officer of MJLAG.  Jackson was the owner and manager of CJ Maxx Group LLC, a limited liability company doing business in Maryland, Virginia, and Georgia.

Trial evidence proved that from August 2012 until February 2017, Jordan and Welsh falsely told victim homeowners that, for a fee, MJLAG could help these homeowners modify their mortgage loans and prevent foreclosure of their homes.  Jordan and Welsh falsely represented that MJLAG could help the homeowners get “free and clear” title to their homes, with no debt or liens against the property, and that MJLAG could obtain money from the homeowners’ lenders, typically by suing the lenders.  Jordan and Welsh told homeowners that they needed to purchase one or more “audits” of the homeowners’ mortgage loans in order to uncover fraud and alleged illegal acts committed by the lenders, and that these “audits” could be used as evidence in lawsuits against the lenders and in negotiating for a loan modification.

Witnesses testified that as part of the scheme, Jordan and Welsh had homeowners sign a “contract fee agreement” setting out what fees would be charged for the “audit.”  The contract fee agreement contained the seal of the National Association of Mortgage Underwriters (NAMU), even though the defendants and their companies had no current affiliation with NAMU.  Jordan advised clients to submit baseless complaints about their lender to state and federal agencies, file frivolous lawsuits in local courts, and to stop paying their mortgages.  Jordan further advised MJLAG clients whose homes already were in foreclosure proceedings to file for bankruptcy in order to delay the foreclosure proceedings and as part of the process to prevent foreclosure of the clients’ homes.  Jordan assisted MJLAG clients in filing for bankruptcy, by preparing bankruptcy petitions and related documents and court filings.

The evidence proved that Jordan and Welsh paid Jackson to prepare fraudulent documents purporting to be “Forensic Audit Reports” and “Real Estate Securitization Audits” relating to loans for properties owned by MJLAG clients.  The victim homeowners paid money to MJLAG with the expectation of receiving assistance with modifying their mortgage loans and preventing foreclosure of their homes.

U.S. District Judge Roger W. Titus sentenced co-conspirator, Carrol Antonio Jackson, a/k/a Jack Jackson, 48, of Hinesville, Georgia, to time served, followed by nine months of home detention as part of three years of supervised release.  Finally, Judge Titus ordered that each defendant pay restitution of $491,036.87.  A federal jury convicted the three co-conspirators on June 20, 2018.  http://www.mortgagefraudblog.com/?s=jordan After the verdict was announced, Judge Titus ordered that Jordan and Welsh be detained pending sentencing and they were immediately taken into custody.

The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Deputy Inspector General for Investigations Rene Febles of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG); Special Agent in Charge Bertrand Nelson of the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG); Postal Inspector in Charge Peter Rendina of the U.S. Postal Inspection Service – Washington Division; Chief Henry P. Stawinski of the Prince George’s County Police Department; Chief J. Thomas Manger of the Montgomery County Police Department; Sheriff Steve Sikes of the Liberty County, Georgia, Sheriff’s Office; and Vernon M. Keenan, Director of the Georgia Bureau of Investigation.

United States Attorney Robert K. Hur commended the FHFA-OIG, HUD-OIG, U.S. Postal Inspection Service, Prince George’s County and Montgomery County Police Departments, Liberty County Sheriff’s Office SWAT Team, and the Georgia Bureau of Investigation for their work in the investigation, and recognized the Maryland Department of Labor, Licensing, and Regulations for its assistance.  Mr. Hur thanked Assistant U.S. Attorneys Kristi N. O’Malley and Nicolas A. Mitchell, and Special Assistant United States Attorney Elizabeth Boison, who prosecuted the case.

Geo Geovanni, 49, Moultrie, Georgia was found guilty of one count of conspiracy to commit bank fraud and three counts of bank fraud.

According to testimony and evidence presented at trial, Geovanni was a real estate broker who owned his own brokerage firm based in Orlando, Florida. Between May and August 2008, Geovanni sold condominium units to buyers at The Landing, located in Altamonte Springs, Florida. Geovanni engaged in a conspiracy to conceal from mortgage lenders sales incentives that he provided to the buyers. These undisclosed incentives included making the buyers’ down payments and paying kickbacks after closing. As a result of his actions, Geovanni helped cause the loss of approximately $761,150 to JP Morgan Chase Bank and Wells Fargo Bank when the mortgages involved in the fraudulent transactions went into foreclosure.

He faces a maximum penalty of 30 years’ imprisonment for each count. His sentencing hearing has been scheduled for February 25, 2019.

United States Attorney Maria Chapa Lopez made the announcement.

This case was investigated by the Federal Housing Finance Agency – Office of Inspector General and the Federal Bureau of Investigation. It is being prosecuted by Special Assistant United States Attorney Chris Poor and Special Assistant United States Attorney Joseph Capone.

 

PHH Mortgage Corporation (“PHH”) has entered into a settlement today with Attorney General Chris Carr’s office to resolve allegations that it violated Georgia’s Fair Business Practices Act by charging unauthorized fees to Georgia consumers.

The Attorney General’s office alleges that PHH, a New Jersey-based mortgage servicing and mortgage originating business, marketed various third-party products and services, including insurance products and home warranty programs, to certain consumers whose mortgages it serviced and placed charges for these products and services on consumers’ mortgage bills. According to the Attorney General, many consumers did not even realize they had signed up for these products and services. Likewise, they were not aware that the cost of these items was being added onto their monthly mortgage payments.

In resolution of these allegations of unfair and deceptive acts and practices, PHH has entered into a settlement requiring it to:

  • comply with the Fair Business Practices Act;
  • refrain from soliciting Georgia consumers’ purchase of and/or enrollment in third-party products and/or services;
  • cease all billing for the products and/or services provided and/or fulfilled by third-parties;
  • notify each consumer it is currently billing for products and/or services provided and/or fulfilled by third-parties that the consumer may cancel the remainder of the contract without penalty;
  • pay $25,000 to fund a Consumer Restitution Trust Account, to be administered by the Attorney General, for consumers who paid fees for third-party products and/or services that, due to any of PHH’s solicitation and/or billing practices, the consumer alleges were not owed; and
  • pay $50,000 to the Attorney General’s office in fees, penalties, investigation and litigation costs, and/or for future  consumer protection and consumer education costs. In the event that PHH fails to comply with the settlement terms at any time during a 120-day monitoring period, an additional $50,000 will immediately become due.

“Our office will hold accountable those that use deceptive means to profit from consumers,” said Attorney General Chris Carr.

Refunds for Consumers

Consumers who paid fees for third-party products and/or services due to any of PHH’s solicitations and/or billing practices may be entitled to compensation under the settlement and  should fill out and submit a prescribed claim form, along with supporting documentation, to the Georgia Department of Law. Claim forms must be postmarked, faxed or hand-delivered no later than 5:00 p.m. EDT on Wednesday, August 29, 2018 in order to be considered for restitution.

Eligibility

Claims must be submitted by or on behalf of consumers who: pfees for third-party products and/or services that, due to any of PHH’s solicitation and/or billing practices, the consumer alleges were not owed; and have not received a full refund from PHH and/or the third-party provider.

Filing a Claim

Consumers can download a claim form from the Consumer Protection Unit website here.

Completed claims and any documentation, should be submitted by mail, overnight delivery, fax or hand-delivery to:

Georgia Department of Law – Consumer Protection Unit

ATTN: PHH Restitution

2 Martin Luther King Jr. Drive SE, Suite 356

Atlanta, Georgia 30334-9077

Fax number:  404-651-9018

You may NOT submit the Claim Form by email.

Claims must be postmarked or faxed no later than 5:00 p.m. EDT on August 29, 2018.

 

Michelle Sylethia Jordan, a/k/a Michelle Harris and Michelle Welsh, 49; her husband, Michael Paul Anthony Welsh, a/k/a Michael A. Welsh and Michael Paul S. Welsh, 45, both of Laurel, Maryland; and Carrol Antonio Jackson, a/k/a Jack Jackson, 48, Hinesville, Georgia, were convicted on June 20, 2018 of conspiracy and mail and wire fraud charges in connection with a foreclosure prevention fraud scheme.

According to the evidence presented at the eight-day trial, Jordan was chief executive officer and director of MJ Loan Auditor Group, LLC (MJLAG), a limited liability company registered and doing business in Maryland.  Welsh was the president, vice president, and director of MJLAG.  Jackson was the owner and manager of CJ Maxx Group LLC, a limited liability company doing business in Maryland, Virginia, and Georgia.

The evidence showed that from August 2012 until February 2017, Jordan and Welsh falsely told victim homeowners that, for a fee, MJLAG could help these homeowners modify their mortgage loans and prevent foreclosure of their homes.  Jordan and Welsh falsely represented that MJLAG could help the homeowners get “free and clear” title to their homes, with no debt or liens against the property, and that MJLAG could obtain money from the homeowners’ lenders, typically by suing the lenders.  Jordan and Welsh told homeowners that they needed to purchase one or more “audits” of the homeowners’ mortgage loans in order to uncover fraud and alleged illegal acts committed by the lenders, and that these “audits” could be used as evidence in lawsuits against the lenders and in negotiating for a loan modification.

Witnesses testified that as part of the scheme, Jordan and Welsh had homeowners sign a “contract fee agreement” setting out what fees would be charged for the “audit.”  The contract fee agreement contained the seal of the National Association of Mortgage Underwriters (NAMU), even though the defendants and their companies had no current affiliation with NAMU.  Jordan advised clients to submit baseless complaints about their lender to state and federal agencies, and to stop paying their mortgages.  Jordan further advised MJLAG clients whose homes already were in foreclosure proceedings to file for bankruptcy in order to delay the foreclosure proceedings and as part of the process to prevent foreclosure of the clients’ homes.  Jordan assisted MJLAG clients in filing for bankruptcy, by preparing bankruptcy petitions and related documents and court filings.

The evidence proved that Jordan and Welsh paid Jackson to prepare fraudulent documents purporting to be “Forensic Audit Reports” and “Real Estate Securitization Audits” relating to loans for properties owned by MJLAG clients.  The victim homeowners paid money to MJLAG with the expectation of receiving assistance with modifying their mortgage loans and preventing foreclosure of their homes.

The defendants each face a maximum sentence of 20 years in prison for conspiring to commit wire fraud, and 20 years in prison for each of ten counts of wire fraud.  U.S. District Judge Roger W. Titus has scheduled sentencing for September 28, 2018 at 9:00 a.m.

After the verdict was announced, U.S. District Judge Roger W. Titus ordered that Jordan and Welsh be detained pending sentencing and they were immediately taken into custody.

The conviction was announced by United States Attorney for the District of Maryland Robert K. Hur; Deputy Inspector General for Investigations Rene Febles of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG); Special Agent in Charge Bertrand Nelson of the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG); Postal Inspector in Charge Eric Shen of the U.S. Postal Inspection Service – Washington Division; Chief Henry P. Stawinski of the Prince George’s County Police Department; Chief J. Thomas Manger of the Montgomery County Police Department; Sheriff Steve Sikes of the Liberty County, Georgia, Sheriff’s Office; and Vernon M. Keenan, Director of the Georgia Bureau of Investigation.

The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes.  This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets.  Information about mortgage fraud prosecutions is available http://www.justice.gov/usao-md/financial-fraud-and-identity-theft.

United States Attorney Robert K. Hur commended the FHFA-OIG, HUD-OIG, U.S. Postal Inspection Service, Prince George’s County and Montgomery County Police Departments, Liberty County Sheriff’s Office SWAT Team, and the Georgia Bureau of Investigation for their work in the investigation, and recognized the Maryland Department of Labor, Licensing, and Regulations for its assistance.  Mr. Hur thanked Assistant U.S. Attorneys Kristi N. O’Malley and Nicolas A. Mitchell, and Special Assistant United States Attorney Elizabeth Boison, who are prosecuting the case.

 

Thomas Scott Brown, 47, Atlanta, Georgia, was sentenced to three years in prison, followed by five years of supervised release, for his role in a bank fraud scheme that resulted in losses of approximately $2.7 million. Brown pled guilty to bank fraud and false statements to a financial institution on June 9, 2017. According to court documents, from approximately 2006 through 2007, Brown purchased properties for buyers with his own money and then directed those individuals to apply for home equity loans with Navy Federal Credit Union, claiming that they owned the properties free and clear of any liens when, in fact, they still owed Brown for the properties. In applying for these home equity loans, Brown instructed the buyers to submit false documentation to the bank, including fraudulent Housing and Urban Development Settlement Statements and false membership applications. Brown further ordered these individuals to pay him from the proceeds of the home equity loans.

In most instances, the homes went into foreclosure after the bank approved the loans. In total, 51 properties Brown sold eventually went into foreclosure, causing Navy Federal Credit Union losses of $2.7 million.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, and Andrew W. Vale, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge Claude M. Hilton. Assistant U.S. Attorney Jamar K. Walker prosecuted the case.

Joseph W. Witkowski, 70, former New Jersey lawyer, Flemington, New Jersey, was sentenced to 48 months in prison for participating in a conspiracy that caused lenders to release $40.8 million based on fraudulent mortgage loan applications and laundered the proceeds of the fraud.  Witkowski previously pleaded guilty to an indictment charging him with one count each of conspiracy to commit wire fraud and conspiracy to commit money laundering. U.S. District Judge Joseph H. Rodriguez imposed the sentence in Camden federal court.

According to documents filed in this case and statements made in court:

Witkowski and his conspirators located oceanfront condominiums overbuilt by financially distressed developers in Wildwood Crest, New Jersey; premier real estate in vacation destinations in Georgia and South Carolina; and properties in New Jersey owned by financially distressed homeowners facing foreclosure. They then recruited “straw buyers” – people with good credit scores but lacking the financial resources to qualify for mortgage loans – to purchase those properties.

Witkowski and his conspirators created false documents, including fake W-2 forms, income tax returns, investment statements, and rental agreements, to make the straw buyers appear more creditworthy than they actually were. They also established numerous telephone lines for companies owned by some of the conspirators so that when a lender contacted the telephone number, the conspirators could falsely verify that a straw buyer was employed by the company listed on his or her fraudulent loan application.

Witkowski also caused fraudulent mortgage loan applications in the name of the straw buyers and supporting documents, which attributed to the straw buyers inflated income and assets, to be submitted to mortgage lenders. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings on the properties, Witkowski and his conspirators had some of the funds wired or checks deposited into various accounts that he and his conspirators controlled.

In addition to the prison term, Judge Rodriguez sentenced Witkowski to three years of supervised release and ordered restitution of $13,105570. As part of his plea agreement, he must forfeit $2,412,899, representing the proceeds of the fraud.

U.S. Attorney Paul J. Fishman announced the sentence.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher; and special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentencing.

The government is represented by Assistant U.S. Attorney Diana Carrig of the U.S. Attorney’s Office in Camden.

Defense counsel: Maggie Moy Esq., Assistant Federal Public Defender, Camden