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Broker Caught With Cocaine in Mortgage Fraud Raid

Mortgage News

An Ohio mortgage broker, fleeing from a raid in a mortgage fraud case, was apprehended with cocaine — unexpectedly turning a criminal fraud case into a drug case.

Todd H. Charske, 32, is the president and operations manager of Kemper Financial Inc. located in the Dayton, Ohio area. Charske and Gregory B. Romer, 27, are accused by FBI special agent Steven M. Darragh of operating a flipping scheme and defrauding Meritage Mortgage Corporation, according to documents filed with and attached to the criminal complaint provided by the Department of Justice to MortgageDaily.com.

Agent Darragh’s affidavit said that Charske apparently was always looking for individuals who might be interested in investing in Dayton-area real estate. One buyer was allegedly told she could purchase one of several properties with no money down or out-of-pocket expenses, and in fact would receive a $5,000 payment for each house she agreed to purchase. Once the initial application was completed, the buyer was introduced to Romer, who would handle the remaining details from that point forward.

Romer, who worked for Kemper as a “mortgage analyst,” allegedly submitted fake documents to Meritage, an Oregon-based subprime wholesale lender indirectly owned by NetBank, Inc., including a fraudulent 1003 uniform residential loan application and fictitious pay stubs.

The buyer was allegedly told by Romer to immediately open a new checking account, which she did with Firstar Bank. Romer is accused of using the starter checks provided with the new account to fabricate canceled rent payment checks. Romer allegedly also changed dates of employment to offset a short time on the current job. Using the fraudulent information, Meritage approved the loan.

At the closing, the affidavit said, the buyer noticed that the address of the property was an adjacent property; she assumed she had been mistaken about the original address. She also assumed the price, which was $17,000 higher than the price she agreed upon, was attributable “to various financing charges.”

Not knowing who provided the nearly $10,000 required “cash from borrower,” the buyer closed on the property.

Following the closing, the buyer realized that the property was one she refused to previously even consider due to the condition. When she inquired about the $5,000 payment she was promised, Charske allegedly told her that he was not responsible for paying her.

Then, Firstar — the bank where she opened the account — contacted her about the fake checks. Apparently, Meritage had inquired about the copies of canceled checks, which were dated up to a year before the account was even open. Following this inquiry, Firstar closed the account.

When the buyer confronted Charske about the fraudulent checks, he allegedly blamed Romer and claimed to be unaware of Romer’s actions. When she contacted Romer, he allegedly indicated he would talk to the individual at her bank and said not to worry about it. However, he did not deny creating the fake canceled checks.

A criminal complaint was filed against, and a warrant for arrest issued for Romer on August 27.

Ohio’s Department of Commerce’s Division of Financial Institutions, which regulates mortgage brokers in the state, issued orders on August 28 notifying Kemper that it intended to revoke Kemper’s mortgage broker certificate of registration. The state agency accused Charske of flipping 17 properties in the Dayton area between August 2000 and May 2001, and accused both Charske and Romer of defrauding lenders and buyers through flipping schemes.

An FBI search warrant at Kemper’s office was executed that same day.

When lawmen raided Kemper’s offices, according to the Dayton Daily News, the mortgage fraud case turned unexpectedly into a drug case when Charske fled out the back door — allegedly with 328 grams of cocaine in a small plastic bucket — into the arms of an FBI agent.

The Daily News went on to report that hours later the judge ordered Charske, who faces 20 years in prison and a $1 million fine, be held without bond pending the outcome of a preliminary and detention hearing.

Romer reportedly faces 35 years in prison and a $1.25 million fine, and was released on a $25,000 bond, the Daily News said.

In another recent Ohio scam, a federal grand jury indicted scores of people in a mortgage fraud scheme. Many Cleveland-area employees of a national net branch mortgage brokerage company were involved in the scam.

Ohio’s Office of Consumer Affairs, which coordinated the action against Kemper, was created in May by Ohio legislators in an effort to reduce the growing number of consumers falling victim to abusive lending practices.

Articles about mortgage fraud cases include:

  • 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.


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