Woman Admits Facilitating Escrow Fraud Scheme

Allison Tussey —  July 15, 2013 — 1 Comment

Rhonda Scott, 52, Oxon Hill, Maryland, pleaded guilty before U.S. District Judge James K. Bredar to conspiring to commit wire fraud in connection with two separate mortgage fraud schemes that resulted in losses of over $2,500,000.

According to her plea, beginning in 2008, Scott agreed to participate in several fraudulent real estate transactions that settled at M&R Title Inc. and Sanford Title Services LLC. The fraudulent transactions at each title company were part of different conspiracies, both of which Scott joined. In both schemes, Scott facilitated deals between her co-conspirators, identified and recruited individuals that could be parties to the real estate transactions generating proceeds for the co-conspirators, received proceeds of the fraudulent transactions through a shell company designed to disguise her receipt of the funds, sent money to co-conspirators, and identified mortgage transactions that the co-conspirators could use to enrich themselves.

As part of the M&R Title conspiracy, the co-conspirators deceived buyers, sellers, and lenders to make it appear to sellers that they were selling their property at a low price and to buyers and lenders that the property was being sold at a higher price. The co-conspirators created paperwork for two different sales of the property at the same time. The first sale was fraudulent because it was backdated, the buyer was planning to immediately flip the property in a subsequent sale, and the settlement statement listed a fake hard money loan. The second sale involved a significantly increased sales price, and the settlement statement showed a significant sum being disbursed to the hard money lender as a payoff of an existing lien, but in reality, those funds would be used for improper disbursements to the co-conspirators.

With respect to the Sanford Title conspiracy, improper disbursements were made from the title company to Scott and others. The conspirators engaged in many fraudulent techniques, including short sales in which the property would be sold for a higher price than the seller was aware of; sales of properties not owned by the seller including properties Scott purported to own but did not own at the time of settlement; real estate transactions in which there were multiple sales of the same property at the same time; showing difference settlement statements to the seller and/or buyer using the difference between the figures in the two statements to enrich themselves; and Sanford Title not disbursing money that should have been paid to lien holders and instead diverting a portion of those funds to co-conspirators.

Both of the M&R Title and Sanford Title fraud schemes involved at least 25 victims, including lenders, sellers, and buyers of real estate, title insurance companies, and lien holders. The reasonably foreseeable loss associated with Scott’s conduct is at least $2.5 million.

Scott will be required to forfeit at least $2.7 million and pay restitution of at least $1 million.

Scott faces a maximum penalty of 30 years in prison and a $1 million fine for conspiring to commit wire fraud. No sentencing date has been scheduled.

Emeka Udeze, 38, Bowie, Maryland; Shola Risikat Balogun, 47, Upper Marlboro; and Niesha Williams, 33, Fort Washington, Maryland, each previously pleaded guilty to their role in the fraud schemes. No sentencing date has been scheduled for them at this time.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge David Beach of the United States Secret Service-Washington Field Office; Inspector General Jon T. Rymer of the Federal Deposit Insurance Corporation; Special Agent in Charge Joe Clarke of the Housing and Urban Development Office of Inspector General-Office of Investigations; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Special Agent in Charge Gene E. Morrison, Washington Field Office, U.S. Department of Justice Office of the Inspector General; Howard County Police Chief William McMahon; Acting Special Agent in Charge Lisa Quinn of the United States Secret Service-Baltimore Field Office; and Howard County State’s Attorney Dario Broccolino.

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 at www.justice.gov/usao/md/Mortgage-Fraud/index.html.

United States Attorney Rod J. Rosenstein commended the U.S. Secret Service, FDIC, HUD-OIG, FBI, Department of Justice OIG, Howard County Police Department, Secret Service, and Howard County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Harry Gruber and Special Assistant United States Attorney Colleen McGuinn assigned to this case from the Howard County State’s Attorney’s Office, who are prosecuting the case.

Allison Tussey

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One response to Woman Admits Facilitating Escrow Fraud Scheme

  1. Hey, this is a great site. Thanks for all this coverage on a topic that does not get enough attention. Fraud damages people greatly and we should be doing more.

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