Two Houston mortgage brokers, one a former state House candidate for the GOP, have pleaded guilty in a case the government says involved more than $11 million in loans on flip real estate transactions.
John M. Beaird, 43, and Rudy Rudolph, 49, have entered into separate plea agreements with the government. Beaird pleaded guilty to one count of wire fraud, and Rudolph pleaded guilty to one count of mail fraud. Each face up to five years in federal prison and a $250,000 fine.
According to case documents provided by the Department of Justice, the two engaged in a scheme where fake documents enabled them to obtain loan approvals on properties used in flip transactions.
From 1996 to 2000 properties were purchased in the name of business entities created by the two, including American Residential Marketing, First Financial Group, and SNC Group. Properties were typically purchased by Beaird and Rudolph using proceeds from the subsequent flip transactions — enabling them to avoid using their own cash.
The government accuses Beaird of engaging in 39 of these transactions for $11.5 million and Rudolph of 15 transactions for $4.8 million.
Lenders to which the two submitted fake documents included Countrywide Home Loans, Wells Fargo Home Mortgage, and WMC Mortgage Corp, according to indictment documents. Among the fake documents were a certificate of deposit receipt, bank records, rent check copies, W-2s, verification of employment, and tax returns.
Inflated appraisals also were involved, according to an announcement from the U.S. Attorney’s office.
Beaird lost the Republican nomination for a Texas House District seat in 2000 to the incumbent, the government said in its announcement.
A poem written by Beaird, Who Is To Blame — currently posted at — opens with the following paragraph:
We read it in the papers and hear it on the air
Of killing and stealing and crime everywhere.
We sigh and we say as we notice the trend,
“This young generation…where will it end?”
But can we be sure that it’s their fault alone?
Are we less guilty, who place in their way
Too many things that lead them astray?
Sam Garcia has been in mortgage lending since 1980, and is publisher of MortgageDaily.com. He also owns and operates CloseNow.com, a real estate portal site.
email: [email protected]
Other articles about mortgage fraud cases include:
- Option One took $2.3 million loss on fraud loans.
- PinnFund U.S.A.’s former CEO reportedly sobs as he is sentenced for one of the biggest fraud cases in southern California history.
- Builder A. William Erpenbeck, Jr. directed his employees to deposit checks made out to construction lenders to the company’s own bank account.
- Angel L. Serrano Jr. accused of duping mortgage lenders in a Massachusetts flip scheme.
- Fraud Flips National Phenomenon: A look at mortgage fraud schemes.
- Atlanta fraud network responsible for more than $100 million in losses.
- 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.
- 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