PORTLAND, Ore. – Three defendants were sentenced in a comprehensive mortgage fraud scheme in federal court today, announced U.S. Attorney Amanda Marshall. Chadwick Amsden, 32, of Portland, was sentenced by the Honorable Robert E. Jones to 27 months in prison and five (5) years of supervised release. On October 5, 2011, Judge Jones sentenced Amsden’s co-defendant, Joel Rosabal, 32, to serve 33 months in prison and five years supervised release. Defendant Adam Perkins, 37, was sentenced by the Honorable Ancer Haggerty on September 19, 2011 to 21 months in federal prison and ordered to pay a restitution judgment of over $1.2 million.
“Mortgage fraud caused a strain on our financial institutions and more tragically, our community,” stated U.S. Attorney Amanda Marshall. “The sentences for these three individuals send a strong message to those criminals who seek to manipulate and risk the stability of our lending institutions and housing market for their own profit—don’t do it or you will go to prison.”
Defendants Amsden and Rosabal were charged in a 21-count indictment, returned by federal grand jury on May 18, 2010, with conspiracy, mail fraud, wire fraud, money laundering, and a forfeiture allegation. The purpose of the conspiracy was to defraud lending institutions by inducing them to lend funds for the purchase of residential properties at an inflated price through the use of materially false representations and omissions, and in doing so, to fraudulently obtain a portion of those funds. During the course of the conspiracy, defendants ensured that loan proceeds were paid to borrowers as incentives or cash “kickbacks.” These cash kickbacks were not disclosed to the lender and ranged from approximately $8,000 to as much as almost $90,000. Defendants manipulated the underwriting process in order to qualify borrowers to purchase homes they would not have otherwise been able to buy. Some of their actions included:
- Temporarily depositing their own money into a borrower’s bank account to show higher bank balances than what the borrower actually had
- Drafting letters purportedly from borrowers which falsely claimed the borrowers’ intention to purchase a home as their primary residence, which allowed them to purchase a home for which they would not otherwise qualify
- Creating false rental agreements which indicated a borrower was collecting rent for another home they owned (frequently obtained by fraud)
- Intentionally omitting other real estate purchased by the borrower in the last 60-90 days on a loan application because it did not show up on the credit report
- Having others falsely pose as an employer for their borrowers or having them lie about the length of employment
- Significantly overstating a borrower’s income
- Encouraging witnesses to lie to investigators about kickbacks given to borrowers
Perkins, through defendants Rosabal and Amsden, purchased eleven (11) homes in eight (8) months, totaling more than $5.8 million in real estate using materially false representations to obtain cash kickbacks. The loss to lenders from the defendants’ scheme was over $3.8 million. Defendants plead guilty to their roles in the scheme earlier this year.
At the sentencing of Rosabal, Judge Jones stated that Rosabal had “engaged in an incredible number of very serious moral lapses and criminal acts.” He further likened the defendants’ crimes to robbing banks and noted that the defendants had “robbed [banks] of more money than probably all of the bank robberies we handle in this court in probably a decade.”
Marcus Williams, the IRS Special Agent in Charge of the Pacific Northwest said, “We all move a step closer to getting the housing industry back on its feet when we hold accountable those who gamed the system through mortgage fraud.”
There is currently one other case related to Lighthouse pending in the United States District Court of Oregon, United States v. Timothy Hills, et al., USDC Case No. 10-CR-00196. In addition, five other defendants have pled guilty and have been or are pending sentencing to charges related to Lighthouse as well: United States v. Timothy Hills, et al., USDC Case No. 10-CR-00196; United States v. Chael Sonnen, USDC Case No. 10-CR-502; United States v. Kamau Herndon, USDC Case No. 09-CR-00068, United States v. Marty Folwick, USDC Case No. 08-R-00280, United States v. Kristen Buse, Case No. 08-CR-00283. The investigation of others remains ongoing.
This investigation was conducted by the Internal Revenue Service, Criminal Investigation, and the United States Postal Inspection Service. The cases involving Lighthouse employees are being prosecuted by Assistant U.S. Attorneys Michelle Holman Kerin and Allan Garten.
