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By admin, May 6, 2012 2:02 am

Why is it that when you call to set up appointments to see homes that are for sale, the owner that gives you the longest song and dance, is the one that says “Motivated Seller”? It’s as if the agent is saying… I know the owner doesn’t appear to be motivated…but please ignore that.

Generally an agent calls to make an appointment and says something like: “Hello. I am planning to show your home today between 4 p.m. and 5 p.m.” The potential responses from the other end of the phone should be:

1) Thank You
2) NO…sorry, that’s not a good time.

Answers come in all forms:

1) Well I was going to go to the store, but I guess I could stay and clean up and go to the store later…

2) Can you come on Tuesday instead of today? Tuesday is a good day for me.

3) Can you call my agent because I like her to be here when agents show the home so she can tell you about all of the wonderful things about my home?

4) Is it a “serious” buyer? Because I don’t want people coming who aren’t serious buyers.

It’s a yes or no question. If your home is for sale and an agent calls to show the home, remember that is what you are supposed to WANT to happen!

Say Thank You and Yes…whenever possible.

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By admin, May 6, 2012 1:52 am

Steven J. Cox, Mobile, Alabama, a real estate investor, has agreed to plead guilty and to serve one year in prison for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in southern Alabama.  To date, as a result of the ongoing investigation, four individuals and one company have pleaded guilty..

Charges were filed in the U.S. District Court for the Southern District of Alabama in Mobile.

Cox was charged with one count of bid rigging and one count of conspiracy to commit mail fraud. According to the plea agreement, which is subject to court approval, Cox has agreed to serve one year in prison, to pay a $10,000 criminal fine, and to cooperate with the department’s ongoing investigation.

According to court documents, Cox conspired with others not to bid against one another at public real estate foreclosure auctions in southern Alabama. After a designated bidder bought a property at the public auctions, which typically take place at the county courthouse, the conspirators would generally hold a secret second auction, at which each participant would bid the amount above the public auction price he or she was willing to pay. The highest bidder at the secret second auction won the property.

Cox was also charged with conspiring to use the U.S. mail to carry out a scheme to acquire title to rigged foreclosure properties sold at public auctions at artificially suppressed prices, to make and receive payoffs to co-conspirators, and to cause financial institutions, homeowners, and others with a legal interest in rigged foreclosure properties to receive less than the competitive price for the properties. Cox participated in the bid-rigging and mail fraud conspiracies from as early as January 2004 until at least May 2010.

Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the statutory maximum fine. Each count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime, or twice the gross loss caused to the victims of the crime by the conspirators.

The Department of Justice announced the guilty plea.

The investigation into fraud and bid rigging at certain real estate foreclosure auctions in southern Alabama is being conducted by the Antitrust Division’s Atlanta Field Office and the FBI’s Mobile Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s Atlanta Field Office at 404-331-7100 or visit www.justice.gov/atr/contact/newcase.htm.

The charges are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The 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. For more information on the task force, visit www.stopfraud.gov.

“The Antitrust Division continues to work with its law enforcement partners to ensure that real estate foreclosure auctions are fair and competitive,” said Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division Sharis A. Pozen. “The division will vigorously pursue those who engage in collusive schemes to eliminate competition in the marketplace.”

FBI Special Agent in Charge of the Mobile FBI Office Lewis M. Chapman recognized the perseverance of agents and prosecutors in this complex investigation. Chapman stated, “This investigation sends the message that real estate fraud, including antitrust violations, will continue to be pursued in these tough economic times, no matter how intricate the scheme.”

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By admin, May 6, 2012 1:51 am

Lawrence B. Stacy, Mobile, Alabama, a real estate investor, has agreed to plead guilty and to serve prison time for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in southern Alabama.  To date, as a result of the ongoing investigation, three individuals and one company have pleaded guilty..

The charges were filed in the U.S. District Court for the Southern District of Alabama in Mobile, Alabama.

Stacy was charged with one count of bid rigging and one count of conspiracy to commit mail fraud. According to the plea agreement, which is subject to court approval, Stacy has agreed to serve six months in prison. Additionally, Stacy has agreed to pay a $10,000 criminal fine and to cooperate with the department’s ongoing investigation.

According to court documents, Stacy conspired with others not to bid against one another at public real estate foreclosure auctions in southern Alabama. After a designated bidder bought a property at the public auctions, which typically take place at the county courthouse, the conspirators would generally hold a secret, second auction, at which each participant would bid the amount above the public auction price he or she was willing to pay. The highest bidder at the secret, second auction won the property.

Stacy was also charged with conspiring to use the U.S. mail to carry out a scheme to acquire title to rigged foreclosure properties sold at public auctions at artificially suppressed prices, to make and receive payoffs to co-conspirators and to cause financial institutions, homeowners, and others with a legal interest in rigged foreclosure properties to receive less than the competitive price for the properties. Stacy participated in the bid rigging and mail fraud conspiracies from at least as early as May 2002 until at least January 2007.

Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the statutory maximum fine. Each count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime, or twice the gross loss caused to the victims of the crime by the conspirators.

The Department of Justice made the announcement.

The investigation into fraud and bid rigging at certain real estate foreclosure auctions in southern Alabama is being conducted by the Antitrust Division’s Atlanta Field Office and the FBI’s Mobile Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s Atlanta Field Office at 404-331-7100 or visit www.justice.gov/atr/contact/newcase.htm.

The charges are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The 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. For more information on the task force, visit www.stopfraud.gov.

“The Antitrust Division will continue to pursue vigorously the perpetrators involved in these real estate foreclosure auction schemes,” said Sharis A. Pozen, Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “Those who eliminate competition from the marketplace and prey on the misfortune of others will be held accountable for their actions.”

FBI Special Agent in Charge of the Mobile FBI Office Lewis M. Chapman recognized the perseverance of agents and prosecutors in this complex investigation. Chapman stated, “This investigation sends the message that real estate fraud, including antitrust violations, will continue to be pursued in these tough economic times, no matter how intricate the scheme.”

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By admin, May 6, 2012 1:48 am

Lydia Fong and Matthew Worthing, both of San Francisco, California, have agreed to plead guilty to their roles in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in northern California. The felony charges were filed in the U.S. District Court for the Northern District of California in San Francisco.

According to court documents, Fong and Worthing conspired with others for various lengths of time between October 2009 and November 2010 not to compete against one another but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in San Francisco County. Worthing was also charged with participating in a similar conspiracy in San Mateo County, California, from September 2010 until January 2011. Fong and Worthing also were charged with conspiracies to use the mail to carry out a scheme to fraudulently acquire title to selected properties sold at public auctions.

The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to make and receive payoffs in order to obtain selected real estate offered at San Mateo and San Francisco Counties public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.

Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the $1 million statutory maximum. Each count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.

The Department of Justice announced.

The charges are the latest cases filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda Counties in California. To date, as a result of the investigation, 22 individuals, including Fong and Worthing, have agreed to plead or have pleaded guilty.

“The collusion taking place at these auctions eliminated competition from the marketplace and allowed the conspirators to profit from the financial distress of others,” said Acting Assistant Attorney General Sharis A. Pozen in charge of the Department of Justice’s Antitrust Division. “The division will continue to pursue the perpetrators of these fraudulent schemes so they are held accountable for their actions.”

“Fraudulent bid rigging and other anticompetitive activities at foreclosure auctions by conspirators are illegal and unfair to individuals who are forced to sell and legitimate buyers looking to purchase homes in our communities,” said FBI Special Agent in Charge Stephanie Douglas of the San Francisco Field Office. “We continue to work closely with our partners at the Antitrust Division to identify and bring to justice those who engage in this type of activity.”

The ongoing investigation into fraud and bid rigging at certain real estate foreclosure auctions in northern California is being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm, or call the FBI tipline at 415-553-7400.

The charges are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The 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. For more information on the task force, visit www.stopfraud.gov.

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By admin, May 6, 2012 1:47 am

Steven J. Cox, Mobile, Alabama, a real estate investor, has agreed to plead guilty and to serve one year in prison for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in southern Alabama.  To date, as a result of the ongoing investigation, four individuals and one company have pleaded guilty..

Charges were filed in the U.S. District Court for the Southern District of Alabama in Mobile.

Cox was charged with one count of bid rigging and one count of conspiracy to commit mail fraud. According to the plea agreement, which is subject to court approval, Cox has agreed to serve one year in prison, to pay a $10,000 criminal fine, and to cooperate with the department’s ongoing investigation.

According to court documents, Cox conspired with others not to bid against one another at public real estate foreclosure auctions in southern Alabama. After a designated bidder bought a property at the public auctions, which typically take place at the county courthouse, the conspirators would generally hold a secret second auction, at which each participant would bid the amount above the public auction price he or she was willing to pay. The highest bidder at the secret second auction won the property.

Cox was also charged with conspiring to use the U.S. mail to carry out a scheme to acquire title to rigged foreclosure properties sold at public auctions at artificially suppressed prices, to make and receive payoffs to co-conspirators, and to cause financial institutions, homeowners, and others with a legal interest in rigged foreclosure properties to receive less than the competitive price for the properties. Cox participated in the bid-rigging and mail fraud conspiracies from as early as January 2004 until at least May 2010.

Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the statutory maximum fine. Each count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime, or twice the gross loss caused to the victims of the crime by the conspirators.

The Department of Justice announced the guilty plea.

The investigation into fraud and bid rigging at certain real estate foreclosure auctions in southern Alabama is being conducted by the Antitrust Division’s Atlanta Field Office and the FBI’s Mobile Office, with the assistance of the U.S. Attorney’s Office for the Southern District of Alabama. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s Atlanta Field Office at 404-331-7100 or visit www.justice.gov/atr/contact/newcase.htm.

The charges are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The 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. For more information on the task force, visit www.stopfraud.gov.

“The Antitrust Division continues to work with its law enforcement partners to ensure that real estate foreclosure auctions are fair and competitive,” said Acting Assistant Attorney General in charge of the Department of Justice’s Antitrust Division Sharis A. Pozen. “The division will vigorously pursue those who engage in collusive schemes to eliminate competition in the marketplace.”

FBI Special Agent in Charge of the Mobile FBI Office Lewis M. Chapman recognized the perseverance of agents and prosecutors in this complex investigation. Chapman stated, “This investigation sends the message that real estate fraud, including antitrust violations, will continue to be pursued in these tough economic times, no matter how intricate the scheme.”

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By admin, May 6, 2012 1:46 am

ohn Partin, 67, appeared before U.S. District Judge Michael R. Hogan on April 23, 20102, and pleaded guilty to conspiracy to commit bank fraud and loan application fraud. The charge arose out of the collapse of Desert Sun Development (DSD), a development and construction company in Bend, Oregon.

As part of his guilty plea, Partin admitted that he caused financial institutions to lose more than $6 million. Sentencing is set before U.S. District Court Judge Michael R. Hogan on October 9, 2012 at 10:00 a.m.

According to court documents, Partin owned and operated Advanced Steel Systems Inc. (Advanced Steel), an Oregon corporation located in Bend, Oregon, that sold steel building kits for commercial construction projects. In court, Partinadmitted that he, at the request of DSD principals, provided fictitious contracts and invoices for steel building kits and related costs that DSD principals used to obtain financing and loan proceeds for some of DSD’s commercial projects. Partin knew DSD principals were submitting these fraudulent contracts and invoices to financial institutions to obtain financing and loan proceeds. To keep track of the fraudulent invoices, defendant maintained an invoice log in which many of these false invoices were labeled “dummy” or “dummy invoice.”

Co-defendants Shannon Egeland, Jeremy Kendall, and Tyler Fitzsimons have previously pleaded guilty and are pending sentencing.

Conspiracy to commit bank fraud carries a maximum sentence of five years in prison and a $250,000 fine.

This case was investigated by the FBI, IRS-Criminal Investigations, and the Oregon Division of Finance and Corporate Securities. Assistant U.S. Attorney Scott E. Bradford handled the prosecution of the case.

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By admin, May 1, 2012 7:23 pm

Scott Dority, 54, San Marino, California, has been sentenced to 121 months in federal prison for defrauding banks and other lenders by using straw borrowers and bogus documents to obtain millions of dollars in loans for houses and high-end vehicles that included Ferraris and Lamborghinis.

The defendant was sentenced by United States District Judge R. Gary Klausner.

Dority pleaded guilty on March 14, 2011 to wire fraud, conspiracy, aggravated identity theft and two counts of tax evasion. When he pleaded guilty, he admitted that his fraudulent conduct caused at least $4 million in losses to financial institutions that issued mortgages and approximately $5 million in losses to institutions that issue loans for the sports cars and recreational vehicles.

Dority also admitted in court that he failed to file tax returns for 2005 and 2006, even though he had hundreds of thousands of dollars in income in each of those years.

According to a now-unsealed court document, Dority, along with others, recruited individuals with good credit to act as straw buyers to purchase residential homes or expensive vehicles. Doritycreated a package of materials – including fake bank statements, fake pay stubs and bogus fake tax returns – to make it appear that these straw buyers had sufficient assets and income to pay back loans used to purchase the real estate and vehicles. These fake documents were then submitted to lenders who relied upon them to issue more than $9 million in mortgage and vehicle loans.

As part of the 121-month prison sentence, Dority received a mandatory two-year prison term for aggravated identity theft.

The investigation into this scheme was conducted jointly by the Federal Bureau of Investigation, IRS – Criminal Investigation, and the United States Secret Service.

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By admin, May 1, 2012 7:18 pm

Harold Rosen, 81, Clayton, Illinois, a real estate developer, was sentenced in US District Court to four years in federal prison on April 20, 2012.

Specifically, the defendant was sentenced to 48 months imprisonment, $700 special assessment, $66,449 in restitution to the city of East St. Louis and three years of supervised release following his prison sentence.

Rosen was convicted on October 27, 2011, for seven counts wire fraud. These offenses were committed in conjunction with attempting to obtain more than $1.9 million dollars of public financing for the failed Bowman Estates development project under false pretenses.

As previously reported by Mortgage Fraud Blog, Rosen admitted that he provided cash payments and a promise of future employment to Arthur M. Johnson, the director of the Community Development Department for the city of East St. Louis, to receive favorable treatment from the city as he attempted to develop the Bowman Estates project. Johnson pled guilty on May 20, 2011, to aiding and abetting Rosen’s wire fraud and to bribery charges for accepting improper benefits in connection with business conducted by his office. Johnson was sentenced to 37 months imprisonment on November 8, 2011.

Rosen was convicted of seven counts of wire fraud in connection with his contract with the city of East St. Louis to construct a $5.6 million dollar low income, affordable housing project to be known as “Bowman Estates.” To obtain the construction contract, Rosen lied about his background and experience, falsely portraying himself as a wealthy man with extensive experience as a developer. He supplied fictitious tax returns and bogus financial statements when he applied for bank loans, and he fabricated loan commitments and a financing contract to mislead the city and the East St. Louis Financial Advisory Authority (FAA) into believing that he had obtained more than $3.6 million dollars of private financing required as a pre-condition to the start of his construction project.

Having deceived the city as to his financial wherewithal and expertise as a developer, Rosen then attempted to pass off considerably cheaper prefab modular housing manufactured in the State of Indiana in lieu of the promised on-site construction in East St. Louis that would have provided job opportunities to local construction workers. Rosen also created phony invoices and lien waivers that were submitted to the city and the FAA in order to obtain reimbursement for expenses that he had not actually paid order to generate working capital for the project.

Rosen attempted to obtain more than $1.9 million dollars of public financing under false pretenses and he was successful in actually obtaining more than $60,000 by fraud. The East St. Louis Financial Advisory Authority (“FAA”), a state agency that oversees East St. Louis city spending, is credited for saving the city from additional losses by successfully blocking the expenditure of public funds from August, 2008, through June, 2009. The FAA also blocked the payment of a fraudulent $40,000 invoice.

United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced the sentence.

The investigation was conducted through the Metro East Public Corruption Task Force by agents from the Internal Revenue Service, The US Department of Housing and Urban Development, and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Steven D. Weinhoeft.

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By admin, May 1, 2012 7:16 pm

Lydia Fong and Matthew Worthing, both of San Francisco, California, have agreed to plead guilty to their roles in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in northern California. The felony charges were filed in the U.S. District Court for the Northern District of California in San Francisco.

According to court documents, Fong and Worthing conspired with others for various lengths of time between October 2009 and November 2010 not to compete against one another but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in San Francisco County. Worthing was also charged with participating in a similar conspiracy in San Mateo County, California, from September 2010 until January 2011. Fong and Worthing also were charged with conspiracies to use the mail to carry out a scheme to fraudulently acquire title to selected properties sold at public auctions.

The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to make and receive payoffs in order to obtain selected real estate offered at San Mateo and San Francisco Counties public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.

Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the $1 million statutory maximum. Each count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.

The Department of Justice announced.

The charges are the latest cases filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda Counties in California. To date, as a result of the investigation, 22 individuals, including Fong and Worthing, have agreed to plead or have pleaded guilty.

“The collusion taking place at these auctions eliminated competition from the marketplace and allowed the conspirators to profit from the financial distress of others,” said Acting Assistant Attorney General Sharis A. Pozen in charge of the Department of Justice’s Antitrust Division. “The division will continue to pursue the perpetrators of these fraudulent schemes so they are held accountable for their actions.”

“Fraudulent bid rigging and other anticompetitive activities at foreclosure auctions by conspirators are illegal and unfair to individuals who are forced to sell and legitimate buyers looking to purchase homes in our communities,” said FBI Special Agent in Charge Stephanie Douglas of the San Francisco Field Office. “We continue to work closely with our partners at the Antitrust Division to identify and bring to justice those who engage in this type of activity.”

The ongoing investigation into fraud and bid rigging at certain real estate foreclosure auctions in northern California is being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-436-6660, visit www.justice.gov/atr/contact/newcase.htm, or call the FBI tipline at 415-553-7400.

The charges are part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The 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. For more information on the task force, visit www.stopfraud.gov.

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By admin, May 1, 2012 7:03 pm

Otis Bernard Livingston, 44, Gulfport, Mississippi; and Dionne Michelle Whitted, 37, Castle Hayne, North Carolina, the ringleaders of a mortgage fraud scam, were sentenced after three days of hearings. United States District Judge William S. Duffey, Jr. concluded the sentencings of a total of six co-conspirators involved in a $3.7 million dollar bank fraud ring involving home equity lines of credit (HELOCs).

Also sentenced: a prolific straw borrower, Shalena Sutherlin, 27, Douglasville, Georgia; a forger of false financial documents,Todd Ivery, 43, Kennesaw, Georgia; former bank employee,Hung Quoc Nguyen, 30, Buford, Georgia; and a recruiter,Catasha Browning, 36, Douglasville, Georgia.

According to information presented in the public record: Between 2006-2007, Whitted operated a company known as “Mastermind Events” in Conyers, Georgia, which was supposed to host seminars, including foreign currency exchange (FOREX) trading training events. Livingston and Whitted, the leaders of the conspiracy, recruited so-called “straw” borrowers, including Sutherlin, who would present themselves to banks as if they were the true owners of property, when, in fact, they were acting without the knowledge of the true owner and were funneling the proceeds back to the schemers. Eventually, Sutherlin evolved beyond a straw borrower to become the president of Mastermind Events, working with Livingston and Whitted on recruiting still more straw borrowers, obtaining false financial documents, submitting the financial information to the banks, and dealing with both bank employees and the straw borrowers.

During the course of the conspiracy, Whitted, Livingston, and Sutherlin made various misrepresentations to convince other straw borrowers to apply for home equity lines of credit (HELOC). Most of these misrepresentations centered on the notion that the defendants’ lucrative FOREX trading business would generate more than enough returns to repay all of the loans along with profits for all. This was a lie, and most of the loans went into default.

The fraudulent activity of the coconspirators was extensive. Whitted and Sutherlin forged quit claim deeds on 18 different residential parcels of property which belonged to home owners, some of whom were unaware of the scheme. Whitted and Sutherlin submitted the deeds along with false financial information in support of applications for 25 HELOCs with Wachovia, Bank of America, andWashington Mutual and received in excess of $3.7 million dollars. Whitted and Sutherlin purchased false financial documents, including tax returns, W-2s, and pay stubs–from Ivery and submitted them to the banks on behalf of the straws. Whitted, Sutherlin, and Livingston also bribed Nguyen, a former Bank of America employee, to facilitate more than $1.4 million worth of fraudulent HELOCs, giving him cash, meals, a resort gift card, and diamond rings. Working with Whitted, Browning recruited a straw borrower to obtain over $380,000 in fraudulent HELOCs. None of the straw borrowers had valid title to the properties.

Over the course of the sentencing hearings, Judge Duffey imposed the following sentences:

Whitted was sentenced to five years, two months in prison to be followed by five years of supervised release, during which she must perform 150 hours of community service, and she was ordered to pay $3,486,508.46 in restitution.

Livingston was sentenced to five years, 11 months in prison to be followed by five years of supervised release, during which he must perform 150 hours of community service, and was ordered to pay $2,956,043.97 in restitution.

Ivery was sentenced to four years, seven months in prison to be followed by five years of supervised release, during which he must perform 100 hours of community service, and was ordered to pay $1,662,425.69 in restitution.

Sutherlin was sentenced to two years, 10 months in prison to be followed by five years of supervised release during, which she must perform 75 hours of community service, and was ordered to pay $2,040,638.67 in restitution.

Nguyen was sentenced to two years, six months in prison to be followed by five years of supervised release, during which he must perform 150 hours of community service, and was ordered to pay $1,425,896.19 in restitution.

Browning was sentenced to one year, two months in prison to be followed by three years of supervised release during which she must perform 60 hours of community service, and was ordered to pay $360,026.43 in restitution.

Livington, Whitted, Sutherlin, and Ivery previously pleaded guilty to making false statements to federally insured banks in connection with obtaining HELOCs. Nguyen pleaded guilty to receiving two diamond rings worth over $8,000 as a reward for facilitating a series of fraud loan applications for HELOCs while he was a senior personal banker at Bank of America. Browning pleaded guilty to conspiracy to commit bank fraud and make false statements to federally insured banks.

This case was investigated by special agents of the Federal Bureau of Investigation and United States postal inspectors.

Assistant United States Attorneys David Leta and Nick Oldham prosecuted the case.

“This fraud scheme, like so many, was based on greed and lies,” said United States Attorney Sally Quillian Yates. “The conspirators designed an insidious scam to target banks and local home owners by using homes to secure loans, many times without the owners’ knowledge. We remain committed to safeguarding our financial institutions and their customers from such financial predators.”