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Stream of Bank Executives Head to Jail

Recent mortgage-related criminal litigation

June 17, 2011

By SAM GARCIA MortgageDaily.com


portrait of Sam Garcia

Several former bank executives, some whose institutions failed, are headed to prison over crimes committed during their tenure. The stream of banking defendants includes executives involved in the Taylor Bean and Whitaker Mortgage Corp. case.

The former chief executive officer of Community National Bank, William Garfield Sandison, was sentenced last month to four months in prison and ordered to pay a $30,000 fine, according to an announcement from the U.S. Attorney's Office in Minneapolis. The Lino Lakes, Minn., bank failed in December 2010.

Sandison, who was originally indicted with his son Ross William Sandison and Curtis Alan Martinson in April 2009, reached a plea agreement in October 2009. He admitted that he fraudulently convinced 20 other banks to join his bank in financing the Ramsey Town Center for $35 million with another $15 million option.

An indictment was unsealed on May 17 against Ronald Johannes Sneijder, who owned closing service provider Red Box Settlements, the U.S. Department of Justice announced. Sneijder allegedly obtained a $581,000 home-equity line-of-credit from Wells Fargo Bank on his Washington, D.C., residence in January 2004. Then in February 2005, he obtained a $581,000 refinance loan from First Savings Mortgage Corp.

Problem was, he didn't pay off the HELOC when he refinanced. In addition, he took out additional advances. That was followed up with another $675,000 loan from Wachovia Bank. That transaction also required that the HELOC be paid off and closed; but Sneijder managed to pay only half of the line and draw even more advances.

Sneijder defaulted, the house went into foreclosure and the sales price was nowhere near enough to pay off the $1,829,000 in accumulated liens.

Peter L. Cash, a former director at Peoples Bank of Coffee County, has been sentenced in U.S. District Court for the Middle District of Alabama to 58 months in prison. Cash allegedly kited $8,123,738 in checks between several banks during the period between October 2005 and July 2008. He also is accused of forging a document on a $1,502,676 business loan.

Former Omni National Bank vice president Karim Walthour Lawrence was sentenced on June 1 in U.S. District Court for the Northern District of Georgia to 21 months in prison, the Department of Justice announced. He pleaded guilty in January to taking $600,000 in bribes.

Atlanta-based Omni failed in March 2009 and was expected to cost the Federal Deposit Insurance Corp. $290 million.

In April, former Omni executive vice president Jeffrey L. Levine, who was convicted on Jan. 14, 2010, was sentenced to five years in prison. He was additionally fined $6,761,791. Levine was the Atlanta bank's second-largest shareholder.

Other defendants in the case include Delroy Oliver Davy, who was sentenced in April to 14 months; Christopher Bernard Loving, who received a sentence of probation in August 2010; and Brent Merriell, who was given a more than three-year sentence in August 2010.

Following her 2007 termination from Countrywide Home Loans, JaimeLe Lawler, also known as Paige Kinney, was hired by PRMI to work in their Phoenix branch. While working there, a Department of Justice news release says, she managed to fraudulently bill the company for $123,000 in mortgages leads.

But it's not the only crime she's accused of committing. Lawler had a leadership role in a nearly $40 million mortgage fraud scheme.

Now Lawler, of Phoenix, has been arrested on bankruptcy fraud charges.

Adrian Carroll was charged in April with embezzling over $1,000 from her former employer, Carolina First Bank, between September 2008 and May 2009, the U.S. Attorney's office announced.

A 30-month sentence was handed down last week by U.S. District Court Judge Roger T. Benitez to Michael Trap, the Justice Department reported. Trap was also ordered to pay $460,249 in restitution to victims of his loan modification scheme.

Through Nations Housing Modification Center and Federal Housing Modification Department, Trap and co-defendant Glenn Steven Rosofsky admitted that they fraudulently induced more than 300 customers to pay between $2,500 and $3,000 for modifications services.

The duo allegedly claimed that they had attorneys and forensic accountants on staff even though they didn't. They also falsely claimed an "extremely high success rate" and that they were located on Capitol Hill in Washington, D.C.

Former Colonial Bank senior vice president Catherine Kissick was sentenced to eight years in prison for helping Taylor Bean and Whitaker Mortgage Corp. defraud the bank, the Associated Press reported. Kissick, who reportedly apologized for her crimes at the hearing, claimed that she was manipulated by the mastermind of the scheme -- former Taylor Bean chairman Lee Farkas.

Farkas awaits sentencing after being found guilty in April. Other former Taylor Bean executives awaiting sentencing are former chief executive officer Paul Allen, who pled guilty in April, and former senior financial analyst Sean W. Ragland, who admitted to the crimes in March. At Colonial, former operations supervisor Teresa Kelly pled guilty in March, and former warehouse lending executive Catherine L. Kissick pled guilty in February.

Former Taylor Bean president Raymond Bowman was sentenced last week to two-and-a-half years in prison, while the company's former treasurer, Desiree Brown, was sentenced to six years in prison.

Frank G. Debelius was sentenced to 13 months in prison after pleading guilty in Harford County Circuit Court in Maryland, the Baltimore Sun reported. Posing as a professional with Bay One Mortgage, Debelius allegedly collected $8,500 from Clark and Cheryl Rorie in return for obtaining a $100,000 reduction in principal on their loan -- though he didn't and they lost the house.

In Hawaii, former Bank of America employee Michael Ho Kim is accused of stealing more than $1 million from the borrowers whose loans were serviced by the bank, Watchdog.org reported. Kim, who is on the lam, was also sued by Robin and Frances Kaneshiro over a soured real estate deal.

The Mortgage Graveyard
Failed, closed and a c q u i r e d mortgage-related entities.



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Sam Garcia founded Mortgage Daily in 1998 and became its full-time publisher in 2000. Before that, he worked in mortgage lending for two decades.

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