Thursday, March 7, 2013

Two Admit Roles in Mortgage Fraud Conspiracy and Money Laundering

CAMDEN, NJ—A former property manager admitted today to conspiring to defraud financial institutions and launder stolen funds as part of a $15 million mortgage fraud scam that used phony documents and “straw buyers” to make illegal profits on overbuilt condos, U.S. Attorney Paul J. Fishman announced.
Last week, a Georgia man also admitted to conspiring to defraud financial institutions and launder stolen funds as part of the same scam.
Timothy Ricks, 45, of East Orange, New Jersey, pleaded guilty today to a superseding indictment charging him with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering. Orlando Allen, 47, of Fayetteville, Georgia, pleaded guilty to the same crimes on February 20, 2013. Both Ricks and Allen entered their guilty pleas before U.S. District Judge Jerome B. Simandle in Camden federal court.

Bank Executive Sentenced to 30 Months in Prison for Mortgage Fraud Scheme

SACRAMENTO, CA—U.S. District Judge William B. Shubb sentenced Joel Blanford, 44, of San Ramon, California, to 30 months in prison, to be followed by three years of supervised release, for a mortgage fraud scheme, U.S. Attorney Benjamin B. Wagner announced. On September 19, 2012, following a seven-day trial, a jury found Blanford guilty of six counts of mail fraud.
This case was the product of an investigation by the FBI and the Internal Revenue Service-Criminal Investigation (IRS-CI). Assistant U.S. Attorneys Paul A. Hemesath and Michael M. Beckwith prosecuted the case.
According to evidence presented at trial, from approximately April 2003 through October 2005, Blanford, while working as a senior sales representative for Long Beach Mortgage, a wholesale subprime lender and former subsidiary of Washington Mutual Inc., participated in a scheme to defraud his employer. Blanford earned compensation based on the volume of loans processed by Long Beach Mortgage. The evidence established that he paid a loan coordinator in cash and checks to falsify documents, provide false verification of borrowers’ employment or professional licensing status and turn a blind eye to fraudulent representations contained in loan applications and other documents submitted to Long Beach Mortgage.
In each of the years 2003, 2004, and 2005, before taxes and payroll deductions, Blanford received more than $1 million in commissions and other compensation from Long Beach Mortgage as a result of his scheme. Between April 2003 and October 2005, he paid the loan coordinator more than $50,000 in checks alone.
U.S. Attorney Wagner stated, “This investigation exposed a sophisticated chain of fraud that started at the homebuyer level and extended all the way to banking insiders. It is a lesson that those earning million-dollar paychecks are not exempt from significant criminal penalties.”

Reginald Dodson Sr. pleaded guilty today to mail fraud in connection with a mortgage fraud scheme

SACRAMENTO, CA—Reginald Dodson Sr., 42, of Tracy, pleaded guilty today to mail fraud in connection with a mortgage fraud scheme, United States Attorney Benjamin B. Wagner announced.
This case is the product of an investigation by the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorney Michael Beckwith is prosecuting the case.
According to court documents, between October and December 2006, Dodson knowingly participated in a scheme to obtain money and property by means of false and fraudulent representations and promises. Buena Marshall, 67, of Sacramento, recruited Temika Reed, 32, of Bay Point, an unqualified straw buyer, to purchase seven properties at inflated prices using, in most cases, 100 percent financing. Marshall, a licensed real estate salesperson, acted as Reed’s agent for four of the seven property purchases. Deborah Loudermilk, 55, of Suisun City, also a licensed real estate salesperson, acted as Reed’s agent for two of the seven property purchases. Dodson, who worked for W.B. Financial, was the loan officer on three of Reed’s seven property purchases.

Man Pleads Guilty to Federal Fraud Charges

LOS ANGELES—The CEO and co-owner of a Diamond Bar investment company pleaded guilty this afternoon to two federal felony counts arising from his scheme to defraud investors who put $49 million into his bogus day-trading venture.
Syed Qaisar Madad pleaded guilty to wire fraud and tax fraud, admitting in court today that investors lost more than $31 million when his scheme collapsed in March 2011.
Starting in 2005, Madad collected money from investors who believed he generated consistent, substantial profits and that their money would be safe and available upon request. During the five-and-a-half-year life of the scheme, Madad received more than $49 million from investors.

Fourteen Arrested for Market Manipulation Schemes That Caused Thousands of Investors to Lose More Than $30 Million

LOS ANGELES—Federal authorities have arrested 14 people named in two federal indictments that allege long-term schemes to manipulate stock prices that led to more than 20,000 investors losing over $30 million when artificially inflated stock prices collapsed. As one defendant described his scheme during a wiretapped phone call: “What I do is turn stock into money.”
The arrests were made yesterday after two grand jury indictments were unsealed Wednesday. The indictments detail two separate, large-scale fraud schemes in which conspirators gained control of the majority of the stock of publicly traded companies, often co-opting company management to assist in these efforts; concealed their control of the stock by purchasing and transferring shares to offshore accounts and to nominee entities with names such as “Dojo,” “Picasso,” and “Big Dog”; fraudulently inflated the prices and trading volumes of the companies’ stocks through slick marketing campaigns, misleading press releases, payments to stock promoters, and “cross-trading” among co-conspirators that made it appear the stocks were being actively traded; coordinated the sale of the companies’ shares at the peak of the fraudulently manipulated market; and hid profits in nominee and offshore accounts.

Dallas Woman Who Represented Herself as a Real Estate Investor Sentenced to 63 Months in Federal Prison

DALLAS—Patience Lavon Jackson, 50, of Arlington, Texas, was sentenced this afternoon by U.S. District Judge Jane J. Boyle to 63 months in federal prison and ordered to pay $2,801,661.95 in restitution, following her conviction for leading a conspiracy to defraud residential mortgage lenders, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. Judge Boyle ordered that Jackson surrender to the Bureau of Prisons on April 3, 2013.
Jackson pleaded guilty in October 2012 to one count of conspiracy to commit mail and wire fraud. Co-defendant Anthony Davis, Jr., 32, of Mesquite, Texas, who was employed as a branch manager at Bank of America, pleaded guilty in September 2012 to one count of conspiracy to commit mail fraud and is scheduled to be sentenced on April 25, 2013. Charlie M. Smith, Jr., of California, another co-defendant in the case, is facing similar charges in the Southern District of Ohio; that case will be adjudicated first.

Wednesday, March 6, 2013

Radio Talk Show Indicted in $9.7 Million Mortgage Fraud Schemes

A suburban Chicago lawyer who hosts a national radio talk show was indicted on federal charges for allegedly engaging in two mortgage fraud schemes that defrauded lenders of a total of approximately $9.7 million. The defendant, Warren Ballentine, allegedly schemed with others to obtain more than two dozen fraudulent mortgage loans and represented buyers at multiple closings, knowing that they were fraudulently qualified for loans to purchase homes in Chicago and various southern suburbs.
Ballentine, 41, of Durham, North Carolina, and formerly of Country Club Hills, owns the Law Office of Warren Ballentine LLC in Country Club Hills. He was charged with two counts of bank fraud, two counts of making false statements to lenders, and one count each of mail fraud and wire fraud in a six-count indictment returned last Thursday by a federal grand jury. The indictment also seeks forfeiture of approximately $9,775,000 in alleged fraud proceeds.
Ballentine is scheduled to be arraigned at 9:30 a.m. on February 5 before U.S. District Judge Matthew Kennelly in Federal Court in Chicago.