In recent months the FBI and US Attorney in the Western District of North Carolina have been charging people in relation to a number of fraud schemes referred to in court documents as “Mortgage Fraud Cell No. 1”; “Mortgage Fraud Cell No. 2”; “Mortgage Fraud Cell No. 3”; “Mortgage Fraud Cell No. 4” and “Mortgage Fraud Cell No. 5”.

Update 1/22/2010 - It is now known that this case is referred to by the prosecutor as the “Waxhouse Investigation and 13 people have so far entered guilty pleas.

There has not been an official press release which deals en masse or individually with these cases and information is difficult to get. However I will be publishing details of any person who is charged and I can obtain public records to support the publication. I have created new Categories (NC Cell #1 and so on) so that you can track those charged/indicted in each cell.

So far, including today’s entries, I have seen 13 people in court records the list of which has been confirmed as complete by the US Attorney. A list of the 13 people can be found below and will be updated when new details are added.

Where
The fraud cells are alleged to have targetted the following Union and Mecklenburg County neighborhoods:

• Providence Downs South
• Woodhall
• Chatelaine
• Skyecroft
• Firethorne
• Piper Glen
• Stratford on Providence
• Waxhaw.

The Scheme

• One member of a cell would agree with a builder to purchase a property at a set (true) price
• The relevant cell would arrange for a buyer to purchase the property at an inflated price
• The builder would sell to the buyer at the inflated price (often $200,000 to $500,000 more)
• The lender would make mortgage loan based on the inflated price
• The difference between the true and inflated prices would be extracted at closing
• The difference would be distributed amongst the cell members

The Misrepresentations

• Failure to disclose true price
• Buyers income and/or assets
• Buyers place of employment
• Intent to occupy
• Down payment source
• False or forged deeds
• Theft of “buyers” ID
• HUD-1 failed to disclose true price
• HUD-1 falsely stated buyer provided down-payment
• HUD-1 failed to accurate disclose the disbursement of the loan proceeds
• Fraudulently listed payments to entities controlled by the cell members
• Failed to disclose buyer was to received portion of the loan proceeds
• Closing attorney’s received the fraud proceeds into trust accounts then distributed to the cell members

Those Charged So Far (click the name to see more details) - By Person

Joseph A. Woods - A loan officer - Cell #2
Willard Edward Wilson - facilitator - Cell #2
Kelli A. Norwood - Paralegal - Cell #’s 2, 3 and 4
Denis Joseph Hickey - facilitator - Cell #5
Christina H. Clark - Real estate agent - Cell #’s 1 and 2
Christine Calbert Gates - Closing attorney - Cell #’s 1,2,4 and 5
Troy A. Smith - Closing attorney - Cell #’s 1 and 2
Gary Mark Woods - Builder - Cell #4
Demetrius Rainer - Closing attorney - Cell #3
Jennifer H. Jackson - Builder - Cell #2
Charles Harris Mathis, Jr - Straw Buyer - Cell #2
Aaron C. Simmons - Promoter - Cell #5
Anthony Curtis Willis - A notary - Cell #2
Kim Cherrie Perry - Promoter - Cell #4

Those Charged So Far  - By Cell

Cell 1
Troy A. Smith
Christine Gates
Christina Clark

Cell 2
Willard Wilson
Kelli Norwood
Troy A. Smith
Joseph A. Woods
Christine Gates
Christina Clark
Jennifer H. Jackson
Charles H. Mathis Jr.
Anthony Curtis Willis

Cell 3
Kelli Norwood
Demtrius Rainer

Cell 4
Kelli Norwood
Christine Gates
Gary Mark Woods
Kim Cherrie Perry

Cell 5
Christine Gates
Denis Hickey
Aaron C. Simmons

Properties so far mentioned in the various cases:
425 Gladelynn Way, Waxhaw, NC
606 Beahaven Lane, Waxhaw, NC
9008 Woodhall Lake Drive, Waxhaw, NC
9115 Woodhall Lake Drive, Waxhaw, NC