In the following press release Tim Johnson, Acting United States Attorney for the Southern District of Texas announced that an indictment charging Tiffany Blake Brooks and Dirk Dewayne Minnifield, both of Houston, Grant William Gondrezick, of Benton Harbor, Mich., and Marc Jason Williams, of Fort Campbell, Ky., with conspiracy and wire fraud in connection with their alleged operation of a mortgage fraud scheme in Montgomery and Harris counties has been unsealed. Joining the US Attorney was FBI-Houston Special Agent in Charge Andrew R. Bland III and Herschell Harvell, Special Agent in Charge, Department of Housing and Urban Development-Office of Inspector General, Region 6, announced today.

“The impact of mortgage fraud on our country and the economy cannot be denied,” Johnson said. “This case and others like it previously filed in our district stands as evidence of our commitment to prosecute those who engaged in mortgage fraud.”

The indictment, returned by a Houston grand jury on Dec. 1, 2008, was unsealed today following the arrest of Gondrezick, 45, Williams, 35, and Minnifield, 47, at their residences this morning by FBI agents. Brooks, 33, is expected to surrender to the United States Marshals Service in Houston tomorrow morning and will later appear before a U.S. Magistrate Judge. Minnifield, 47, is expected to appear in federal court in Houston later today before United States Magistrate Judge Mary Milloy. Gondrezick, 45, is expected to have his initial appearance in Grand Rapids, Mich., while Williams, 35, is expected to appear in Paducah, Ky., today.

According to the indictment, the mortgage fraud scheme took place between November 2004 and May 2005. Gondrezick, who operated multiple companies purporting to be in the business of home improvements, is alleged to have recruited and paid straw buyers to purchase properties in which the sales contracts stated the seller would be paying a substantial amount of money for upgrades the buyers desired. Gondrezick is accused of having invoices falsely showing he had installed custom renovations or home theater rooms sent to the title company, resulting in his receiving disbursements at closing. Neither the buyers nor sellers, according to the indictment, ever requested these renovations and the work was never actually performed.

Brooks, who worked as a loan processor at Lone Star mortgage, is alleged to have prepared the loan applications in the names of the straw buyers and included false information about their income, as well as having recruited straw buyers along with Gondrezick. Williams, who was also a loan processor at Lone Star, is also alleged to have assisted in preparation of the false loan applications and then to have created his own contracting company which began to receive disbursements for renovations that were never done. According to the indictment, Minnifield was a realtor who purportedly represented the buyers in these transactions even though he never met any of the buyers and they never asked to go and look at the properties they were supposedly buying and where they were planning to reside. It is also alleged Minnifield would contact the sellers’ agents and propose the language in the sales contract which would increase the sales price of the properties to include a substantial payment for the supposed renovations. Minnifield is also listed on the incorporation documents for one of Gondrezick’s companies that received the disbursements for work that was never performed.

“Combating mortgage fraud is a priority because the lending infrastructure and the housing market have such a significant effect on the nation’s economy,” Bland said.“Those who undermine the economic vitality of our community and our nationwill be held fully accountable for their actions.”

“This prosecution is a reflection of highly effective investigative and prosecutive coordination between HUD-OIG, FBI and the U.S. Attorney’s Office,” Harvell said. “We, as well as our law enforcement partners, will continue to aggressively investigate and bring those who are committing mortgage fraud to justice.”

The indictment alleges the loans that were part of this scheme totaled approximately $10 million and that the disbursements for renovations that were never performed exceeded $1.5 million.

All four defendants are charged with one count of conspiring to commit wire fraud and eight substantive counts of wire fraud. The conspiracy charge carries a punishment of up to five years in prison, while each wire fraud count carries a prison sentence of up to 20 years if convicted. All the counts could result in a fine of up to $250,000. The indictment also contains a notice of forfeiture seeking a money judgment for $10,000,000.

The case was investigated by the FBI and the Department of Housing and Urban Development - Office of Inspector General. The case is being prosecuted by Assistant United States Attorney Gregg Costa.

An indictment is a formal accusation of criminal conduct, not evidence. The defendants are presumed innocent unless and until convicted through due process of law.

Update on Monday, August 17, 2009 at 4:39PM by The Editor - Ian Shuter - ACFE, DMS

Grant William Gondrezick, 45, has pleaded guilty to conspiring to commit wire fraud, United States Attorney Tim Johnson announced today. Gondrezick pleaded guilty this morning before U.S. District Judge Melinda Harmon. Sentencing is set for Dec. 4, 2009, when he faces up to five years in prison, a fine of up to $250,000 and up to $1.9 million in restitution. Gondrezick will remain on bond pending his sentencing. Gondrezick is a current resident of Benton Harbor, Mich., and formerly of Houston.

According to the factual basis in Gondrezick’s plea agreement, Gondrezick engaged in a mortgage fraud scheme between November 2004 and May 2005 that involved the sale of 24 homes, most of which were in Montgomery County. Gondrezick recruited straw buyers who entered sales contracts for homes which stated that substantial amounts (typically between $80,000 and$100,000) were going to be taken out of the seller’s proceeds at closing and sent to one of Gondrezick’s contracting companies for home improvements. These amounts were added to the asking price of the homes though neither the seller nor the nominee buyer asked for the improvements or hired Gondrezick’s company. Gondrezick submitted invoices to the title companies in these amounts to justify the third-party disbursements, claiming that custom renovations or home theater work had been performed. In fact, no such work was performed. Because the nominee buyers never planned to live in the homes, the buyer never complained about the lack of renovations which had been paid out of the closing. Gondrezick received approximately $1.9 million in these disbursements out of the loan proceeds which totaled approximately $10 million.

Gondrezick further admitted that the straw buyers were paid to participate in this scheme and that the loan applications contained false information relating to the buyers income, employment, assets and intent to occupy the homes.

Co-defendants Tiffany Brooks, who worked as a loan processor, Dirk Minnifield, a realtor, and Marc Jason Williams, who worked with Brooks as a loan processor, are also charged for their alleged involvement in this scheme and are scheduled for a Feb. 1, 2010, trial. They are presumed innocent unless convicted through due process of law.

The case was investigated by the FBI and the Department of Housing and Urban Development Office of Inspector General. The case is being prosecuted by Assistant United States Attorney Gregg Costa.

Update on Monday, August 17, 2009 at 4:40PM by The Editor - Ian Shuter - ACFE, DMS

Grant William Gondrezick, 45, has pleaded guilty to conspiring to commit wire fraud, United States Attorney Tim Johnson announced today. Gondrezick pleaded guilty this morning before U.S. District Judge Melinda Harmon. Sentencing is set for Dec. 4, 2009, when he faces up to five years in prison, a fine of up to $250,000 and up to $1.9 million in restitution. Gondrezick will remain on bond pending his sentencing. Gondrezick is a current resident of Benton Harbor, Mich., and formerly of Houston. According to the factual basis in Gondrezick’s plea agreement, Gondrezick engaged in a mortgage fraud scheme between November 2004 and May 2005 that involved the sale of 24 homes, most of which were in Montgomery County. Gondrezick recruited straw buyers who entered sales contracts for homes which stated that substantial amounts (typically between $80,000 and$100,000) were going to be taken out of the seller’s proceeds at closing and sent to one of Gondrezick’s contracting companies for home improvements. These amounts were added to the asking price of the homes though neither the seller nor the nominee buyer asked for the improvements or hired Gondrezick’s company. Gondrezick submitted invoices to the title companies in these amounts to justify the third-party disbursements, claiming that custom renovations or home theater work had been performed. In fact, no such work was performed. Because the nominee buyers never planned to live in the homes, the buyer never complained about the lack of renovations which had been paid out of the closing. Gondrezick received approximately $1.9 million in these disbursements out of the loan proceeds which totaled approximately $10 million.