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Attorneys Guilty in $40 Million Case

Attorneys gone wild

May 2, 2007


photo of Patrick Crowley
Lawyers in Georgia, Illinois and New Jersey are guilty of breaking the law in a cadre of mortgage fraud schemes -- including one case in excess of $40 million.

In New Jersey, attorney Chris Olewuenyi, 49, of South Orange, has admitted to his involvement in a conspiracy to flip more than 40 properties in a scheme to defraud Flagstar Bank U.S. out of more than $6 million, according to a statement from the U.S. Attorney's office in Newark.

Prosecutors say Olewuenyi is the sixth person to plead guilty in the scheme that involved identity theft, straw buyers and false documents, including mortgage applications.

Olewuenyi, a closing attorney, was paid by others in the scheme to submit false documents to Flagstar, including deeds, settlement statements and false representations about disbursements, prosecutors said.

The false documents allowed the straw buyers to receive loans on "distressed properties" that were falsely inflated.

"Olewuenyi admitted that from approximately April 2004 to December 2004 -- he conspired with (others) to submit documents containing false information to Flagstar, including a deed that falsely identified the seller of one property," prosecutors said.

He faces up to five years in prison and a fine of $250,000.

In Sandoval, Ill., lawyer Eric Dean Troutt, 40, has pleaded guilty to charges that he falsified a loan application to get a mortgage from Old National Bank, according to the U.S. Attorney's office for the Southern District of Illinois.

He was formally convicted of making a false statement to a financial institution and was sentenced to 15-months in prison. Troutt also pleaded guilty to tax evasion. He admitted to failing to report nearly $200,000 in income he received as payment for legal services.

"Troutt used the unreported income to purchase luxury vehicles, real estate property and luxury furniture as well as other various purchases, including credit card and student loan payments," prosecutors said.

Troutt was also ordered to pay his back taxes.

And in Atlanta, two lawyers have been convicted of mortgage fraud for submitting false documents at closings and "facilitating the distribution" of money to others in a large mortgage fraud scheme that totaled more than $41 million, said U.S. Attorney David Nahmias in a statement.

Lawyers Christopher Halcomb and Andrew Wolf each pleaded guilty to conspiracy to commit mortgage fraud.

All told, 10 people were convicted in the scheme on charges of fraud and money laundering.

"These guilty verdicts condemn the corrupt actions of the key people who were responsible for this fraud scheme, from crooked attorneys and appraisers to loan officers," Nahmias said. "The verdicts in this case take us one step closer to repairing the corroded cornerstone of a large-scale corrupt housing market that has made the metro Atlanta area one of the most active mortgage fraud locations in the nation."

Patrick Crowley is a feature journalist and blogger for He is also a reporter, blogger and columnist for The Cincinnati Enquirer.
e-mail Patrick at: [email protected]

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