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Mortgage Lawsuits News | Mortgage Litigation Index
Mortgage industry lawsuit news and mortgage litigation coverage. Stories about legal settlements, judgments and mortgage class actions.

3 Face Sentences for Mortgage Crimes

Recent mortgage-related criminal legal actions

Jan. 18, 2010


A former mortgage broker who stole more than $100,000 from a reverse mortgage borrower has been sentenced to six years in prison despite showing up at his sentencing with a $50,000 check for his victim. In another case, a Texas woman was sentenced for cleverly diverting proceeds from loan closings to her personal accounts. A third case has a former bank executive admitting that he cooked the books and facing sentencing along with two other related defendants who are accused of mortgage fraud.

The U.S. Department of Justice announced that Jeffrey L. Levine pleaded guilty to cooking the books of Omni National Bank -- which left the government with $290 million in losses and 144 employees without a job when it failed in March 2009. The guilty plea was the result of a collaborative effort between the Justice Department, the Federal Deposit Insurance Corporation's inspector general, the Atlanta postal inspector, the special inspector general for the Troubled Asset Relief Program and the U.S. Department of Housing and Urban Development's inspector general.

Levine, who was the second-largest shareholder of the Atlanta-based bank, was executive vice president and head of Omni's community redevelopment lending department from 2000 until October 2007. The unit provided short-term rehabilitation financing on Section 8 properties for subprime borrowers.

He colluded with other Omni executives to hide many exceptions made to underwriting policies and procedures, according to the government. Levine allegedly hid the diversion of loan proceeds escrowed for
rehabilitation. He also concealed excessive credit concentrations to a single borrower and the funding of additional loans for foreclosures -- some financed up to five times at higher amounts. He additionally failed to create sufficient reserves for bad loans.

Levine is scheduled for sentencing on March 23. Two other defendants, Delroy Oliver Davy and Mark Anthony McBride, have agreed to plead guilty to fraudulently obtaining millions of dollars in loans and await sentencing. A third defendant, Brent Merriell, has pleaded not guilty.

Jodie Hoang was sentenced to 30 months in prison for allegedly stealing $1 million from her employer, Standard Mortgage Corp., a government news release Thursday indicated. Hoang pleaded guilty on Sept. 15, 2009.

The former accounting clerk used the New Orleans-based firm's computer system to change the deposit codes for payments made at loan closings. Hoang then created checks from the stolen funds payable to either herself or to her credit card providers.

Former mortgage broker John McTaggart was sentenced by San Francisco Superior Court Judge Charles Haines to six years in prison over allegedly stealing $140,000 in reverse mortgage proceeds from an 86-year-old woman.

McTaggart allegedly convinced the borrower to sign over the funds for two annuities he promised to purchase on her behalf. But instead, he deposited the funds to his personal account, quit his job and paid her fake annuity payments from the funds.

Ultimately, McTaggart fled to Memphis, Tenn., where he was arrested. At his sentencing, McTaggart presented the prosecutor with a $50,000 cashier's check made out to the victim.

photo of John McTaggart
Photo of John McTaggart

In. re. Jeffrey L. Levine.
Dec. 22, 2009 (U.S. District Court for the District of Georgia).

United States of America v. Jodie T. Hoang.
(U.S. District Court for the Eastern District of Louisiana).

Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of in 2000.

[email protected]

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The Mortgage Graveyard
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