A massive mortgage fraud ring in Atlanta responsible for more than a hundred million dollars in losses on hundreds of properties has been broken up by federal authorities.
Among the early players was Glenn Melvin Allen, who was employed as a loan officer and branch manager at Bankers Financial Group, Inc. of Greenbelt, Maryland, a mortgage brokerage. Allen brokered HUD insured mortgages for unqualified borrowers, according to the U.S. Attorney’s office. Allen is accused of arranging for the financing of fraudulent loans by using false documentation and bribing others to do the same. Among the coconspirators on Allen’s payroll were borrowers, recruiters of unqualified borrowers and a tax preparer,
Lenders allegedly defrauded by Allen include his employer, Bankers Financial Group, Inc., Countrywide Home Loans, 1st Jefferson Mortgage Corp., Premier Lending Co., Banc-financial Services Corp. and Title West Mortgage, Inc. In the Criminal Indictment against Allen, the government cited 31 properties where Allen used fraud to obtain more than $4 million in HUD financing.
A $227,920 mortgage on Allen’s primary residence was among the 31 properties. Allen allegedly used his son’s social security number as his own in that transaction.
Ann Fuhlmer, who has been working with local groups to fight mortgage fraud in Georgia, said that these loosely affiliated network of flippers caused her neighborhood to deteriorate, bringing criminal elements near her own suburban dwelling. She said some of the same properties were re-flipped within the same network. Fuhlmer, who now works as the assistant District Attorney with DeKalb County, said there were dozens of groups consisting of 4-5 participants, and 35 people are now in jail.
Fuhlmer said that flips, which were involved in these fraudulent deals, are transactions where a property is sold multiple times in a short period (same day to two weeks). The fair market value is inflated by using fraudulent appraisals.
Another player in the ring was Nafeesha Muminah Mohammed, a loan processor in the Stone Mountain, Georgia area. According to a Criminal Information document provided by the Departement of Justice, Mohammed, who also was known by the name Odessa Davis, was employed by Integrity South. The government has accused her of using fake documents, and directing her employees to do the same, to obtain mortgage loan approvals.
Mohammed is accused of using a counterfeit verification of deposit from a nonexistent California bank to obtain loan approval for the purchase of her own residence. She also allegedly forged the landlord’s signature on a fake verification of rent and created dummy cashier’s checks to conceal a poor rental payment history from the lender, Creve Coeur Mortgage Company. In addition, she created fake W-2’s and paystubs from a fictitious employer, according to the complaint.
Excluding her personal residence, the complaint listed nine properties with financing totaling more than $1.5 million where Mohammed used fraudulent loan files to obtain loan approval.
One loan processor, Miriam Elizabeth Rebeka Heflin, allegedly submitted $2.3 million in fraudulent loans to lenders including Creve Coeur, Temple Inland, Assoc. Financial Svcs and DMR Financial Svc via Residential Mortgage. According to the Criminal Information filed against her, Heflin processed loans through Integrity South, New Atlantic Mortgage and Georgia Home Funding.
A mortgage broker, Claude Andrew Blevins, Jr., and Renee Antoinette Meeks were accused in Criminal Information filings of creating and submitting nearly $15 million in fraud loans and flipping properties in Lithonia and Stone Mountain. Lenders the two allegedly defrauded include Chase, Countrywide, Southstar, Crossland, RBMG, Mtg Portfolio, Loan City, Wells Fargo and GN Mtg Corp. Blevins ran the bogus packages through his company, American Mortgage Exchange.
Kay D. Williams Polote is accused by the government of paying off other mortgage brokers, straw borrowers and bank employees to effect mortgage fraud, according to a copy of the Criminal Information filed against her. Polote, who was an owner of Gold Coast Mortgage Group and Northeast Mortgage, allegedly used shell companies she owned to give lenders the appearance of legitimate settlement payoffs while fraudulently obtaining more than $1.5 million in proceeds from the closings.
Among the lenders Polote is accused of defrauding are:
|American National Mortgage||First TN Bank||New South Federal|
|Amresco||Home Loan Corp.||Old Kent Mortgage|
|Bank One||Home Mortgage||Peoples Choice|
|Chadwick Mortgage||Household||Pinnacle Direct Funding|
|Chapel Funding||IndyMac Bank||Premier Lending|
|CitiFinancial Mortgage||Long Beach Mortgage||Saxon Mortgage|
Union Planters Bank
|Finance America||Mortgage Portfolio Services|
Polote allegedly paid homeless people to act as straw borrowers, including one that used a fake ID to secure a loan on a 2001 Mercedes CLK 320 Convertible for Polote.
In all, Polote secured approvals on about $18.5 million in mortgages, according to the Criminal Information, earning an estimated $623,500 in mortgage broker fees — $31,800 from a single loan.
Fuhlmer, the DeKalb County Assistant District Attorney said, “Georgia ranks 4th in a recent nationwide survey of reported mortgage fraud cases, lagging only behind Florida, California and Maryland. Metro Atlanta’s losses due to mortgage fraud exceed $100 million, but there is no slowdown in sight and losses are expected to rise.”
Fuhlmer noted that mortgage fraud is a national phenomenon and its “true scope is unknown because there are no systems in place to fully measure its occurrence and it is under-reported because of financial penalties imposed on lenders/investors who discover it in their portfolios.”
Articles about mortgage fraud cases include:
- Several southern California individuals have been charged for defrauding lenders and HUD of millions.
- The Provident Bank has reportedly filed a civil lawsuit against Community Home Mortgage Corp., accusing the company of fraud.
- Todd H. Charske and Gregory B. Romer of Kemper Financial Inc. are accused by the FBI of operating a flipping scheme and defrauding Meritage Mortgage Corporation
- According to the Suspected Fraud Activity Index for August of this year, the state showing the most deterioration in the Fraud Index combined with the higher activity levels is Texas.
- Two Virginia men are accused of using a Virginia title insurance agency to illegally divert loan proceeds for their own benefit.
- 83 individuals have been indicted by a Cleveland grand jury for participating in mortgage fraud schemes.
- Former PinnFund CFO admitted to being a coconspirator in the $300+ million Ponzi scheme
- Three Peoria, Illinois women were sentenced for their involvement in a mortgage loan scam where they defrauded a bank of $1.7 million in a classic flip transaction scheme
- Shirley Harwood and her employee pled guilty to defrauding two lenders out of more than $6 million
- Loan originator Brian J. Wilkozek and two loan processors are among fifteen people indicted in a south side Chicago “flipping” scheme
- Edward Rostami was sentenced to a year in prison for using a fraudulently obtained property title to obtain a $1 million loan
- Rene Abreu was among 11 people indicted in a case involving The Mortgage Pros, Inc. in Guttenberg, New Jersey
- David Allan Van Velzer, Jr., was sentenced to more than 8 years in prison for wire fraud and money laundering
- Kenneth Bradford and Jo Ellen Bryant received 10+ year sentences in a Georgia flipping case
- Seven indicted in AppOnline.com mortgage fraud scheme
- Indian authorities apprehended Rajiv C. Shah, one of two brothers that allegedly sold loans with fraudulent documentation to 3 U.S. lenders
- Loans originated by originated by Chapel Creek Mortgage Banker, Inc. could cost Chase Manhattan Mortgage Corp. between $10 and $20 million
- Kent E. Baklor was sentenced for defrauding two lenders of over $8.5 million
- Tamira Smyth was sentenced in a Chicago ‘flipping’ scam involving twenty defendants
- Former Las Vegas mortgage broker David Ferradino was sentenced to five years’ probation and ordered to pay $4.2 million in restitution to 90 investors
- Michael Graham received a sentence of more than 12 years in prison and was ordered to pay $515 million in restitution for his role in the failure of The First National Bank of Keystone.
- Yehuda Shiv was charged by the SEC with overstating the value of his clients’ assets by more than $139 million
- Cheryl A. Swain pleaded guilty to a charge of mail fraud in connection with her conduct as the VP for Marketing Syndication of MCA
- Robert B. Herbert, Jr. of Raleigh allegedly “embezzled and misappropriated moneys from Stewart Title.
- Donald Lukens allegedly defrauded more than 100 investors — including popular sports figures — of at least $12.5 million in a number of schemes, including one involving mortgage backed securities
- Steven D. Mueffelman and John S. Lombardi charged in a 15-count indictment with mail and wire fraud
- Raymond T. Jackman, JR. was sentenced to two years’ probation
- GreatStone Mortgage in Florida is accused of fraud, sexual harassment.
- The government is pursuing mortgage fraud cases in Charlotte and Cleveland.
- Miami family allegedly ran a mortgage fraud ring that swindled lenders out of $3.8 million.
- Maryland is the state with the most instances of possible fraud, according to Affinity Corporation’s ‘Suspected Fraud Activity Index’ for the months of June, July and August.
- Thomas Eck and Zahra Gilak made as much as $15 million, and defrauded investors of $100 million in sham that included online mortgage brokerage
- Richard Wood, a Las Vegas mortgage broker accused of bilking millions of dollars from dozens of investors in a nationwide Ponzi scheme, was gunned down outside his home.
- FBI Investigating Massive Mortgage Fraud Case In Spokane
- Richard Michael McDowell, who through southern California-based Active Home Loans and M&M Loan Service admittedly swindled an estimated $7 million from about two dozen investors, was sentenced to 27 months in federal prison.