When it comes to mortgage fraud, the family that steals together goes down together.
An Indianapolis mother and her two sons have pled guilty to federal charges of fraudulently selling 20 homes in a $2.2 million mortgage scam.
Brenda Beckwith, 52, pled guilty to mail fraud and money laundering and faces up to 15 years in prison and a $500,000 fine, according to the plea agreement she signed with federal prosecutors.
Her sons — Jamichael Dante Watts, 25, and Jabbar Montez Watts, 31 — each pled guilty to mail fraud, money laundering and identity theft and face 30 years in prison and fines of $750,000, according to their plea agreements.
All three have plea hearings scheduled November 26.
“Those who participate in mortgage fraud believe that they can operate undetected because these schemes involve a complex web of co-conspirators and money laundering to conceal the proceedings,” Susan Brooks, U.S. Attorney for the Southern District of Indiana, said in a statement.
According to prosecutors and court documents, the sons worked as mortgage brokers while the mom, who also periodically worked in the mortgage industry, acted as a “straw purchaser” for some of the properties in what authorities called “the mortgage fraud scheme.”
Court records show that Jabbar Watts served as loan broker in 15 of the bogus sales, which totaled $1.75 million. Brother Jamichael served as broker in another seven fake sales that totaled $750,000.
Beckwith was the straw, or bogus, purchaser in five of the loans where “$600,000 was fraudulently obtained,” prosecutors said.
“The defendants fraudulently obtained large amounts of money from several lending institutions by submitting false loan applications, fraudulent financial documents, and falsely inflated appraisals for the purpose of obtaining mortgage loans,” prosecutors said in the statement.
The scheme was based on flipping. The family members or their straw buyers purchased homes in low-income areas, mostly on the northeast side of Indianapolis. Shortly after, the properties were sold at an inflated price.
As an example of the type of transactions used in the scheme, prosecutors pointed to two homes purchased by Jabbar Watts for $80,000 and $30,000.
“In the alleged flip transactions, loans in the amounts of $340,000 and $324,000 were obtained in the names of a person whose identity had been stolen,” prosecutors said.
To facilitate the loans the defendants obtained fake drivers’ licenses by stealing the identities of other people. The scam also relied on false loan applications, phony tax forms and other bogus documents that included employment verifications and bank accounts.
Jabbar Watts even created phony inflated appraisals by using real estate appraisal software and forging the name of a legitimate appraiser, prosecutors said.
“After obtaining the fraudulent loan proceeds, the defendants and others shared the funds and engaged in various transactions to launder the money,” prosecutors said.
Most of the scam loans fraudulently obtained have not been repaid, are in default and have or will be foreclosed on.
