Operation Stolen Dreams, which targeted mortgage fraudsters in the Eastern District of Texas and throughout the country is the largest collective enforcement effort ever brought to bear in confronting mortgage fraud.
George M. Baehr, Jr., 35, Dallas, Texas pleaded guilty to an Information on June 16, 2010, charging him with mail fraud. Baehr entered his plea before U.S. Magistrate Judge Don Bush.
According to court documents, from July 2006 to November 2006, Baehr, a loan officer, devised a scheme to defraud mortgage lenders by submitting false information to secure mortgage loans for real estate purchases. Baehr was a loan officer for either Meridias Capital, Inc. or for City Mortgage Holding, L.L.C., during this time.
If convicted, Baehr faces up to 20 years in federal prison.
Other Operation Stolen Dreams cases in the Eastern District of Texas include:
United States vs. John Barry, et. al
A 16-count indictment was returned by a federal grand jury on March 10, 2010, charging 40 defendants from Texas, Florida, Massachusetts, Tennessee, and Georgia with conspiracy to commit mail and wire fraud, mail fraud and money laundering.
According to the indictment, beginning in 2004, John Barry, 41, Windemere, Florida, owned and operated, TKI Group, Inc. and JAB Consulting, businesses out of Florida through which he solicited real estate agents, property finders, mortgage brokers, title company attorneys or escrow officers, property appraisers, and straw buyers to facilitate this scheme. The purpose of the scheme was to defraud lending institutions by convincing them to approve mortgage loans for residential properties for which the property values had been fraudulently inflated. The indictment specifically lists 114 residential properties located in the Texas cities of Allen, Arlington, Cedar Hill, Coppell, Corinth, Cypress, Dallas, Flower Mound, Fort Worth, Frisco, Granbury, Heath, Highland Village, Houston, Keller, Lantana, Lewisville, Little Elm, Lubbock, Magnolia, McKinney, Plano, Roanoke, Southlake, Spring, The Woodlands, and Willis.
United States vs. Esshan Samuel Agha
Esshan Samuel “Sam” Agha pleaded guilty on October 19, 2009, to conspiracy to commit mail fraud and was sentenced to 51 months in federal prison on April 1, 2010. Agha was also ordered to pay restitution in the amount of $4,127,131.50.
According to information presented in court, from October 2005 to February 2008, Agha, a real estate investor, devised a scheme in which he solicited others to buy homes that in most cases were in fact owned by himself or an unnamed co-conspirator. A smaller number of homes were also owned by a third party for whom Agha brokered the sales. Agha facilitated the scheme by making false statements that included misrepresentations such as overstating the buyers’ income and stating that the buyers intended to occupy the homes as their primary residence. All of the loans involved in the scheme went into default when the buyers failed to make the mortgage payments on the homes, which included 24 properties in Collin County and one in Tarrant County, Texas.
United States vs. Micaiah Pruitt, Jeanelle Richardson, Pierre Sowell and Reginald Davis
Micaiah Pruitt pleaded guilty on September 30, 2009, to conspiracy to commit mail fraud and wire fraud and was sentenced to 71 months in federal prison on March 18, 2010. Pruitt was also ordered to pay restitution in the amount of $1,384,015.26. Pruitt had been indicted by a federal grand jury on June 11, 2009.
According to information presented in court, from March 2005 to October 2006, Pruitt orchestrated a mortgage fraud scheme in which three individuals, Jeanelle Richardson, Pierre Sowell, and Reginald Davis, each bought two or more residential properties from Pruitt, or from someone for whom Pruitt was brokering the sale. In order to obtain the mortgage loans to make the purchases, Pruitt assisted Richardson, Sowell and Davis in making false statements in the mortgage loan applications, such as overstating income or representing that the borrowers intended to occupy each home as their primary residence. Pruitt profited from each of the sales and paid the three purchasers for making the purchases. The purchasers defaulted on all of the mortgage loans.
Richardson, 37, Plano, Texas, pleaded guilty on May, 20, 2009, to conspiracy to commit mail fraud and wire fraud and was sentenced to 20 months in federal prison in February 2010. She was also ordered to pay restitution in the amount of $468,838. Richardson had been indicted by a federal grand jury on April 6, 2009.
Sowell, 37, Grand Prairie, Texas, pleaded guilty on August 13, 2009, to an information charging him with conspiracy to commit mail fraud and was sentenced to 20 months in federal prison in February 2010. Sowell was ordered to pay restitution in the amount of $605,627.
Davis was indicted by a federal grand jury on April 6, 2009, and charged with conspiracy to commit mail fraud and wire fraud. He pleaded guilty on July 9, 2009, and was sentenced in January 2010 to 6 months in federal prison to be followed by 6 months home confinement. Davis was also ordered to pay restitution.
Attorney General Eric Holder in Washington, DC, representatives of the Financial Fraud Enforcement Task Force in Plano, Texas, including U.S. Attorney John M. Bales, announced the regional results of the nationwide take-down.
The sweep was organized by President Obama’s interagency Financial Fraud Enforcement Task Force, which was established to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. Starting on March 1, to date Operation Stolen Dreams has involved 1,215 criminal defendants nationwide, including 485 arrests, who are allegedly responsible for more than $2.3 billion in losses. Additionally, to date the operation has resulted in 191 civil enforcement actions which have resulted in the recovery of more than $147 million.
“Mortgage fraud ruins lives, destroys families and devastates whole communities, so attacking the problem from every possible direction is vital,” said Attorney General Holder. “We will use every tool available to investigate, prosecute, and prevent mortgage fraud, and we will not rest until anyone preying on vulnerable American homeowners is brought to justice.”
Unlike previous mortgage fraud sweeps, Operation Stolen Dreams focused not only on federal criminal cases, but also on civil enforcement, recovering money for victims and increasing cooperation with state and local partners.
The President’s Financial Fraud Enforcement Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.