Entries in Arkansas (8)
Owner of manufactured housing company convicted in mortgage fraud
Tuesday, December 12, 2006 at 03:39PM In the following press release Bud Cummins, United States Attorney for the Eastern District of Arkansas announced that a federal trial jury in Little Rock, Arkansas returned a guilty verdict late Thursday against Debra Jean Price, 52. Price was convicted of one count of conspiracy to commit mortgage loan fraud.
Two other defendants, Debby Cossitt, 53, of Searcy, Arkansas, and Shannon Hill , age unavailable, both pled guilty during the middle of the trial. Cossitt pled guilty to one count of conspiracy to commit mortgage loan fraud and one count of filing a false income tax return for 1998. Shannon Hill pled guilty to once count of conspiracy to commit mortgage loan fraud.
“These cases are difficult to try because of their complexity and the number of documents involved, but they are important,” said Cummins. “The agents and prosecutor who tried the case are to be commended for their sticktoitiveness.”
Cossitt, owner/manager-operator, of several manufactured home sales companies in Searcy, Batesville, Jonesboro, and Harrison, Arkansas, admitted to fraudulently submitting falsified mortgage loan applications and supporting documents to lenders in order to increase sales. These actions allowed higher credit risk customers to appear more qualified for mortgage loans. Additionally, Cossitt admitted to not reporting over $32,000 in income on her 1998 federal income tax return from cash sales for wheels and axles no longer needed once manufactured homes were delivered to customers.
Price and Hill were both employed by Cossitt. From April 22, 2002, until approximately November 2003, all three conspired to submit misleading and false statements to lending institutions. These misrepresentations included falsified customer bank statements with inflated balances, falsified cashier’s checks reflecting an inflated customer down payment, inflated W-2 forms, falsified pay stubs or wage and earning statements, and falsified customer loan applications. Additionally, Hill and Cossitt participated in “telephone audits” with mortgage lenders, impersonating customers and/or directing customers to make misrepresentations directly to lenders.
This investigation was conducted by IRS Criminal Investigation and the Federal Bureau of Investigation.
Click here for the press release
Click here for the indictment.
The Editor - Ian Shuter
Jane W. Duke, Acting United States Attorney for the Eastern District of Arkansas, announce that Debby Cossitt, 54, of Searcy, Arkansas, was sentenced to serve 30 months in prison, followed by three years of supervised release. Judge Susan Webber Wright also ordered Cossitt to pay restitution of $120,000 to victims of her fraud and $9,560.00 to the Internal Revenue Service. Judge Wright barred Cossitt from working in the loan industry during her period of supervised release.
Title company owner pleads guilty to mail fraud
Friday, March 24, 2006 at 03:10PM Mark Friedman reports for The Arkansas Business.com that Mary O’Hanlon-Smith, who owned Global Title Co. of Sherwood, pleaded guilty in U.S. District Court Thursday to mail fraud and failing to file tax returns. O’Hanlon-Smith, 50, of Scott, will be sentenced at a later date but faces up to 21 years in federal prison and a $350,000 fine.
From December 2003 until the company closed its doors in October 2004, O’Hanlon-Smith said she received money from home buyers financial institutions and diverted them for her own use, rather than paying off the seller’s existing mortgage, as required, according to a news release by U.S. Attorney Bud Cummins. The total losses were $2.3 million.
O’Hanlon-Smith also failed to file tax returns for 2002 and 2003. The tax loss to the U.S. was nearly $46,000 in 2002 and $86,000 in 2003, Cummins said in the news release.
Click here for the FBI Press Release
Click here for the original story in Arkansas Business by Mark Friedman
Click here for a list of things the Escrow Funds were spent on. Copyright © 2006, Arkansas Business Publishing Group
Two Women Convicted of Real Estate Mortgage Fraud
Friday, May 20, 2005 at 06:09PM Two women were convicted May 18 in U.S. District Court for conspiracy and wire fraud in a scheme involving the selling of low-cost housing at inflated prices. A jury found Tina Leigh Brown, 33, of
Shanna Moore Allen, 33, of Maumelle, also was found guilty of one count of conspiracy and 22 counts of wire fraud.
Between February 2001 and December 2003, Allen, Brown and three others, Paul Robertson, Kesha Miller McIntosh, 32, and Kenneth Dwayne Kelly, 50 — “engaged in a multimillion-dollar real estate and mortgage scheme involving more than 30 properties in central Arkansas,” said Bud Cummins, U.S. attorney, in a news release.
The
“The conspiracy involved submitting false documentation to mortgage lenders and banks to induce overfinancing of questionable mortgages,” Cummins said.
Moore and Brown worked under the business name Guaranty Lending out of Bryant.
Robertson, McIntosh and Kelly have pleaded guilty to conspiracy. Robertson was sentenced to 57 months in federal prison while McIntosh and Kelly are awaiting sentencing. Brown and Allen face up to five years in prison, a $250,000 fine for the conspiracy count and up to 30 years in prison and a $1 million fine on each wire fraud count.
Benton man faces long prison term for forging appraisals
Saturday, March 26, 2005 at 12:57PM The Chalotte Observer - March 26, 2005
In an extract from an article in the Charlotte Obersever it was reported that Paul Robertson, 31, is set to serve 15 years in an Arkansas prison for manipulating real-estate appraisals on properties in Benton, Ark. Robertson used appraisal software to defraud lenders to grant home loans on empty lots, according to Robert Herzfeld, prosecuting attorney for the Saline County Prosecutor’s office. To orchestrate the scheme, Robertson purchased new appraisal software and gave it to an appraiser he contracted to work with him.
Click here to read the Court Docket Sheet
According to Herzfeld, Robertson, who owned and operated a Benton home construction business called PAR Homes, made copies of the software on his own computer so he could alter the appraisals before sending them off to lenders.
"He’d alter it on his copy of the software. In some instances, he’d literally cut and paste a picture of the home and put it on a (picture of) a vacant lot," Herzfeld said.
By forging the market value of homes and sometimes nonexistent houses, Robertson caused some victims to end up with a mortgage worth more than their home’s real value while others were left with nothing or fell into foreclosure.
"There will be repercussions on this for the next several years — having a significant impact on this community for a long time," Herzfeld said.
U.S. Attorney Indicts Three for Mortgage Fraud in Arkansas
Thursday, December 9, 2004 at 12:29PM Three men have been indicted in connection with a mortgage fraud scheme, U.S. Attorney Bud Cummins announced Wednesday. Alvin Clay, 37, Donny McCuien, 25, and Raymond Nealy, 29, were charged on various federal counts including conspiracy, aiding and abetting wire fraud, and aiding and abetting money laundering.
The indictment alleges the three conspired to obtain five mortgages totaling more than $299,000 through fraudulent means. The indictment alleges that Clay and Nealy would show false invoices showing construction to be done on homes after purchases, but the work was never done. The invoices, issued through Clay Construction Co., would be submitted to title companies, and the invoice totals would be included in the loan amounts paid by the title companies at the time of closing.
“Once the title company paid the invoice at closing to Clay Construction Co., Clay would cause the money to be deposited and then in turn would write checks to McCuien and/or McCuien Property Management for a portion of the monies paid out by the title companies on the fraudulent invoices,” the attorney’s office said.
The indictment also said the defendants would inflate buyers’ account balances on loan applications related to the deals.
Nelson Miller, Freedom Financial Colleagues Indicted
Wednesday, December 8, 2004 at 09:34AM They are each charged with 16 counts: 15 counts of wire fraud of a financial institution and one count of conspiracy to make false statements to a financial institution. Please click here to read the indictment
“The indictment alleges that the defendants caused mortgage loan application documents to be sent to lending institutions containing false information,” a news release from Cummins’ office said. “The false information concerned appraisals, title status, creditworthiness of buyers and hidden fees.”
The object of the alleged conspiracy and wire fraud, according to the statement, was to enduce lenders to make loans they wouldn’t have made, or to make larger loans than they would have made had they had complete and factual information. Lenders listed as victims in the indictment include First Union National Bank of North Carolina; defunct Alliance Funding of Texas; New Century Mortgage of California; Saxon Mortgage of Virginia; Provident Bank of Ohio; a Union Planters Bank office in Mississippi; and GMFS of Louisiana. Nelson Miller also owned Absolute Abstract and Title Co. in Little Rock and controlled a Louisiana company called Jefferson Doc Prep, according to the indictment. “The purpose of this company was to charge Freedom Financial borrowers for document preparation services,” the indictment said.
“Miller failed to disclose his involvement in either of these companies to lenders, enhancing his ability to misrepresent or conceal title issues and increased closing fees,” the news release said.
Between January 2000 and the end of March 2002, the indictment said, Freedom Financial originated at least 84 loans with a total value of more than $3.5 million that contained inflated fees and materially false information. Dorsey was described as comptroller of Freedom Financial and manager of Absolute Abstract.Casey Miller, who opened another mortgage origination business in Little Rock after Freedom Financial shut down, and Soukkaseum were “team leaders” for Freedom Financial. Soukkaseum managed the company’s Fort Smith office.
According to the indictment, Miller and the defendants defrauded the lenders by making fundamental misrepresentations in loan origination documents. Existing liens were removed from title commitments, borrower income was inflated, and appraisers hired by Freedom Financial knowingly inflated the value of property pledged as collateral. In one case, the indictment alleges that an appraiser named Bill Barnes “appraised a property he believed to be worth $17,000 for $29,000,” and Soukkaseum submitted the appraisal to First Union Bank even when the owners said they didn’t think it was worth as much as $10,000. Casey Miller allegedly taught an apprentice appraiser named Mike Troutman how to create inflated appraisals in February 2000. “Mike Troutman subsequently inflated at least 25 percent of all the appraisals he completed for Freedom Financials,” the indictment said.Unindicted employees mentioned in the indictment include Dave Fleming, Robert Byrd and Nichole Jones, who were team leaders and loan office managers; Melissa Horner, who managed the comptroller’s office at Freedom Financial in Little Rock; Arlene Ladd and Mike Ragsdale, who were managers for Absolute Abstract and Title.
The Editor - Ian Shuter
On September 1, 2006 the US DOJ in Little Rock announced that the last defendant in this case had been found guilty. Bertram Miller faces up to 5 years imprisonment when he is sentenced at a later date.
Please click here to see a chart showing all of the convictions and sentences handed down in this case.
Deputies find fugitive in closet
Wednesday, December 1, 2004 at 09:23AM The Benton Courier — December 1, 2004
An Alexander woman who had been evading federal marshals for 19 days was found Monday hiding in a bedroom closet of her home by U.S. marshals, accompanied by a Saline County sheriff’s deputy. The deputies went to 48-year-old Mary Edelmann’s home at 8807 Springhill Road in Alexander about 11 a.m., after learning that she had returned there. She had changed her appearance by dying her blond hair black, according to a news report.
Edelmann was found and taken to Pulaski County jail after about a 40-minute search in her approximately 3,000 square-foot home, said Saline County Deputy B.K. Dobbs. Jim Hays, a spokesman with the marshal service in Little Rock, said officials did not know where Edelmann was before she returned home. He said she was not cooperative, the news report states. She said she and the four deputy marshals finally located Edelmann in the second master bedroom closet.
Dobbs added that Edelmann “started screaming: ‘Don’t kill me, don’t kill me. I know you have hatchets.’”
Edelmann, formerly of Maumelle, was scheduled to report to federal court in Little Rock by noon Nov. 10 to begin serving prison time for two sets of fraud convictions. However, she failed to report to the marshal service or appear for a 1 p.m. hearing that day before U.S. District Judge George Howard, which prompted the judge to issue a warrant for failing to appear.
A federal jury convicted Edelmann in June of five felonies - two counts of mail fraud and wire fraud and one count of money laundering - in connection with schemes she conducted in 2001. The schemes involved using phony bank documents to receive a $300,000 loan to purchase a home in Maumelle and opening a credit card account in the name of a California woman. She has maintained that she is innocent and was “set up,” according to the news report. While serving a prison sentence in 1989 in Kentucky for bank fraud, Edelmann was charged with fabricating court orders in a failed attempt to plan her own release.
AR Loan Officers License Suspended
Tuesday, August 31, 2004 at 09:11AM State of Arkansas - ORDER NO. C-04-089-04-OR01 - Aug 31, 2004
The license, #15600 of Loan Office Mark G Jackson an employee of Kingridge Financial Mortgage of Little Rock AK was suspended after it was discovered he had failed to reveal a felony conviction on his sworn License Application.