In the following press release the FBI announced that WANDA MORGAN TYLER, 60, of Duluth, Georgia, was sentenced today by United States District Judge Thomas Thrash on charges of mail fraud, relating to a scheme to defraud a mortgage lending program operated by the United States Department of Veterans’ Affairs (“VA”). (Editors note, this press release came out in May and I missed it - sorry)

“We continue to focus on prosecuting real estate professionals who contribute to the substantial mortgage fraud problem in the Atlanta area. This fraud harmscommunities and drives up lending costs. In this case, which involved a federal benefits program, it also harmed taxpayers. Our continued prosecution of these types of frauds shows that participating in mortgage fraud is a good way to end up in prison.”

TYLER was sentenced to 33 months in prison to be followed by 3 years of supervised release, and found liable for approximately $900,000 in criminal restitution. TYLER pleaded guilty to these charges on February 16, 2006.

According to United States Attorney Nahmias and the information presented in court: TYLER, using an alias, operated as a real estate agent in the Atlanta area in 2000-2002, during which she arranged for over 20 real estate transactions under the VA’s Lendee Vendor Program. This was a program by which the VA sold properties to the general public, along with direct financing or loan guarantees. The VA previously acquired these properties by way of foreclosure, after veterans defaulted on VA guaranteed loans.

The indictment (click here to view it) shows that she operated under the business name of Atlanta’s Best Realty from three addresses; 5805 States Bridge Road, Duluth; 1007 Baytree Lane, Duluth and a mail drop at 6855 Jimmy Carter Boulevard, Norcross.

In over a dozen cases, TYLER created and submitted to the VA false wage statements, bank records, and other financial documents in the names of the purchasers that she represented, often without the purchasers’ knowledge. She did this to mislead the VA as to the credit-worthiness of the purchasers, thereby ensuring that the transactions would be approved and that TYLER would receive substantial commissions. In some cases, TYLER submitted bids under false identities that she created. As part of her scheme, TYLER used several aliases and different companies, all to conceal from the VA that TYLER was behind the scheme. The VA lost over $900,000 as a result. This includes over $180,000 that the VA paid to TYLER in commissions from these fraudulent transactions, as well as over $720,000 in foreclosure losses, as almost all of the purchasers or purported purchasers defaulted on their mortgages.This case was investigated by Special Agents of the Federal Bureau of Investigation, the Department of Veterans’ Affairs, and the Department of Housing and Urban Development. Assistant United States Attorney Justin S. Anand prosecuted the case. For further information please contact David E. Nahmias (pronounced NAH-meus), United States Attorney or F. Gentry Shelnutt, Chief, Criminal Division, through Patrick Crosby, Public Affairs Officer, U.S. Attorney’s Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.usdoj.gov/usao/gan .

In over a dozen cases, TYLER created and submitted to the VA false wage statements, bank records, and other financial documents in the names of the purchasers that she represented, often without the purchasers’ knowledge. She did this to mislead the VA as to the credit-worthiness of the purchasers, thereby ensuring that the transactions would be approved and that TYLER would receive substantial commissions. In some cases, TYLER submitted bids under false identities that she created. As part of her scheme, TYLER used several aliases and different companies, all to conceal from the VA that TYLER was behind the scheme. The VA lost over $900,000 as a result. This includes over $180,000 that the VA paid to TYLER in commissions from these fraudulent transactions, as well as over $720,000 in foreclosure losses, as almost all of the purchasers or purported purchasers defaulted on their mortgages.This case was investigated by Special Agents of the Federal Bureau of Investigation, the Department of Veterans’ Affairs, and the Department of Housing and Urban Development. Assistant United States Attorney Justin S. Anand prosecuted the case. For further information please contact David E. Nahmias (pronounced NAH-meus), United States Attorney or F. Gentry Shelnutt, Chief, Criminal Division, through Patrick Crosby, Public Affairs Officer, U.S. Attorney’s Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is .

United States Attorney Tom Colantuono and the Special Agent in Charge of the Northeast Field Office of the Department of Veterans Affairs (VA) Office of Inspector General, Criminal Investigations Division, Jeffrey G. Hughes, announced that Chief United States District Court Judge Steven McAuliffe sentenced Robert Mayer, a former employee of the VA Regional Loan Office in Manchester, New Hampshire to 63 months in prison earlier today.

While working for the VA, Mayer’s duties included hiring contractors to repair, maintain and sell residential properties the VA was required to purchase when veterans defaulted on mortgage loans that were partially guaranteed by the VA.

When he pleaded guilty to conspiracy and bribery charges last March, Mayer admitted that he dishonestly manipulated the VA’s contract award and payment procedures for four contractors to whom he awarded more than $4 million in contracts over a five-year period. One of the contractors, John Burke of 4 Cross Road in Derry, New Hampshire, received contracts worth more than $3 million from Mayer. In exchange for the contracts, Burke made numerous secret cash payments, totaling more than $100,000, to Mayer. Burke also renovated bathrooms, installed central air-conditioning, repaired and made improvements to Mayer’s residence at 4 Hidden Road in Salem, New Hampshire for free.

He also paid other individuals to repair and make improvements to Mayer’s home and a home that is owned by one of Mayer’s relatives. Mayer also used his authority as an employee of the VA to award government contracts to two other contractors, a plumber and an electrician, who helped Burke renovate the bathrooms and install central air-conditioning in Mayer’s home for free. A fourth contractor who received contracts from Mayer, regularly mowed Mayer’s lawn, installed a retaining wall along Mayer’s driveway, and occasionally plowed snow from the end of his driveway for free.

Mayer was also ordered to repay $419,400 .00 to the VA. He will be on supervised release for 3 years when he is released from prison. Burke has pleaded guilty to conspiracy and bribery charges. He will be sentenced by U.S. District Court Judge Paul Barbadoro next month.

Depart of Veterans Affairs Press Release — June 17, 2004

John McDermott, Special Agent in Charge, Department of Veterans Affairs (VA), Office of Inspector General (OIG), announced today that in US District Court for the Eastern District of Texas, located in Sherman, TX, Rocky Shaw was sentenced to 18 months’ imprisonment after being found guilty of committing Mail Fraud in connection with his purchase of Federally insured mortgage properties. Following his release from prison, Shaw will also be required to serve 5 years under a supervised release program. Shaw was also ordered to pay restitution in the amount of $351,102, as well as pay a fine of $20,000, including court costs.

McDermott stated that Shaw’s conviction resulted from a joint investigation conducted by his South Central Field Office, the Department of Housing and Urban Development (HUD) OIG, the Federal Bureau of Investigation (FBI), and a number of local law enforcement agencies located in the Dallas, TX, metropolitan area. McDermott advised that from 1998 to 2002, Shaw purported to buy and sell homes in the Dallas/Fort Worth Metroplex. Shaw offered to buy homes at no cost to the seller and in any condition. Shaw also offered to sell homes to perspective buyers by offering owner financing and no qualifying necessary. The offers were made through Prestige Property Specialists and Premiere Property Specialists, which were bogus companies that Shaw owned and operated. Once Shaw obtained control of the properties, he would collect house payments from individuals, but fail to pay the existing HUD and VA backed mortgages, a crime known as equity skimming .

Dept of Veterans Affairs Press Release - November 12, 2003

Douglas J. Carver, Special Agent in Charge, U.S. Department of Veterans Affairs (VA), Office of Inspector General, Western Field Office, Los Angeles, CA, announced today that RAY E. TOMLINSON and PENNY D. LUBANKO were sentenced in U.S. District Court, Central District of California. Carver advised the sentencing followed TOMLINSON’s and LUBANKO’s guilty pleas to charges of Bankruptcy Fraud, Equity Skimming, Conspiracy, False Use of a Social Security Number, and False Statement in a Bankruptcy.

The investigation revealed that TOMLINSON and LUBANKO engineered and executed an Equity Skimming scheme involving hundreds of VA guaranteed, HUD insured and conventionally insured loans. Additionally, that TOMLINSON and LUBANKO filed bankruptcies involving fraudulent names and social security numbers in California, Arizona and Nevada in order to stall foreclosure on the subject properties and perpetuate their scheme.

Dept of Veterans Affairs - April 16, 2003

John McDermott, Special Agent in Charge, Department of Veterans Affairs (VA), Office of Inspector General (OIG), announced today that Rockie D. Shaw was indicted by a Federal Grand Jury in United States District Court, seated in the Eastern District of Texas, located in Sherman, TX, for violating Title 18, of the United States Code, § 1341 (Mail Fraud) and § 1709-2 (Equity Skimming). Following the Indictment, an Arrest Warrant was issued causing Shaw to be arrested and booked into the Grayson County Justice Center, in Sherman, TX.

McDermott stated that the indictment and arrest of Shaw resulted from a joint investigation conducted by his South Central Field Office, agents from the Department of Housing and Urban Development (HUD) OIG, and the Federal Bureau of Investigation (FBI). The Indictment disclosed that Shaw owned and operated businesses identified as “Prestige Property Specialists” and “Premiere Property Specialists,” which bought and sold single family homes in the Dallas Fort Worth Metroplex. Shaw obtained his property inventories from distressed homeowners and then sold the properties to others with no credit checks. The rents collected by Shaw, via the United States Mail, from the new homebuyers were not applied to the existing mortgages, which were Federally insured either by HUD or by VA. Because of non-payment, the mortgages were foreclosed and the homebuyers were evicted from the properties.

US DOJ Press Release — April 24, 2002

NEWARK - Three persons who allegedly participated in an “equity-skimming” scheme involving properties throughout New Jersey were indicted today on charges of diverting tens of thousands of dollars per month in rental income to their own use, rather than towards mortgage or tax payments, U.S. Attorney Christopher J. Christie announced.

Timothy Burke, 51, of Bridgeport, Conn., charged with conspiracy, equity skimming and two counts of mail fraud

Paul Ligas, 42, of Lyndhurst, charged with conspiracy, equity skimming, and two counts of mail fraud, and

Renee Wilmot, 37, of Lyndhurst, charged with conspiracy, equity skimming and two counts of mail fraud

The Indictment alleges that between 1993 and 1999, Burke and Ligas engaged in equity skimming, and that Wilmot joined them in 1996. Burke and Ligas owned and operated businesses named Lincoln Management, Franklin Properties and Tower Management (collectively “Lincoln Management”) in carrying out their scheme. Wilmot was their office manager. All three businesses were located in Lyndhurst, initially at 63 Ridge Road and later at 219 Stuyvesant Ave.

Equity skimming is a name generally applied to a type of fraud that consists of the practice of purchasing residential properties whose owners are in default on their mortgages or their real estate taxes, and then diverting rental income from these properties for personal gain rather than applying this rental income toward mortgage payments, the payment of taxes and other property-related expenses.

The defendants told various homeowners in default that by selling their residences to Lincoln Management, that would wipe the slate clean and that Lincoln Management would take over all of the homeowners’ property-related debts and obligations.

The Indictment identifies eight specific properties acquired by Lincoln Management. They were located in Garfield, Hillside, West Orange, Newark, Plainfield, Ridgewood and Paterson. In each case, the original homeowner had defaulted on his/her mortgage loan or on his/her property tax payments.

After buying the properties from the homeowners, Lincoln Management diverted the rental income from these properties for the use of the defendants, but did not make the mortgage or tax payments owing on them.

In some cases, Lincoln Management collected rent from the very same homeowners from whom it had bought the property. The properties were eventually foreclosed upon by the banks that had made the original mortgage loans.

The Indictment alleges that over 168 properties were involved in Lincoln Management’s scheme. In the month of June 1998, for example, the total rental value of the properties then controlled by Lincoln Management was $82,000.

Various banks and federal agencies, such as HUD and Veterans Affairs, that had insured some of these mortgage loans sustained losses on the properties taken over by Lincoln Management. For example, HUD lost over $1.4 million on the Lincoln Management properties.

Dept of Veterans Affairs Press Release  - March 2001

SACRAMENTO-United States Attorney John K. Vincent announced today that defendants Raymond Hall, 69, of Citrus Heights, and Richard Buschman, 62, and Sandra Weaver, 50, of Davis, were found guilty of mail fraud (11 counts) and equity skimming (1 count). The verdict follows a two-week bench trial before U.S. District Court Judge Frank C. Damrell, Jr.

According to documents filed by Assistant United States Attorneys Robin R. Taylor and Norman Y. Wong, who prosecuted the case, the government proved that the defendants participated in schemes to defraud eleven homeowners about to lose their home to foreclosure. The defendants followed the foreclosure sales and solicited homeowners in default or behind on their mortgage payments.

Hall, Weaver and Buschman and others working with them, met with these desperate homeowners and offered them a deal. They promised homeowners that they “could stop foreclosure” and “save their credit” if they transferred ownership of their homes to the defendants through a trust - and paid the defendants money characterized as rent. Some homeowners were led to believe that they would no longer be obligated on their mortgages. The defendants told the homeowners that by doing so they would stop the foreclosure and save their homes as promised.
The evidence showed that the defendants used this ruse to gain ownership of the properties and collect money from the homeowners or renters as long as they could keep the lenders at bay. The defendants collected “rent” from homeowners even though the homeowners could have remained in their houses through foreclosure without paying anything. The defendants never made payments on the mortgages, and instead, used the money for their personal expenses. The evidence demonstrated that homeowners failed to get what the defendants promised - all of the homes were lost through foreclosure, and the homeowners’ credit was destroyed. Some homeowners were evicted with little or no warning.

The equity skimming charged revolved around the same scheme. Two homeowners were able to purchase their homes only after obtaining federally insured loans through the Department of Veteran’s Affairs or FHA. By pocketing the money paid by these homeowners, instead of paying the money to the lenders, on the federally funded loans, the defendants committed this crime.

Sentencing is set in this matter for March 26, 2001. For both the mail fraud and equity skimming crimes, the defendants face a maximum of five years in prison on each count, and a fine of up to $250,000 on each count. The case was investigated by the Federal Bureau of Investigation and the Department of Veteran’s Affairs - Office of Inspector General.

Dept of Veterans Affairs Press Release — November 21, 2000

Kenneth R. Atkins, Special Agent in Charge, Southeast Region, Office of Inspector General (OIG) Department of Veterans Affairs (VA), announced that on November 20, 2000, Daniel F. CARMICHAEL, a disbarred Alabama attorney and former prosecutor, pleaded guilty to mail fraud in U.S. District Court in the Middle Judicial District of Alabama.

CARMICHAEL, who acted as the closing attorney for real estate transactions, fraudulently certified that proceeds from VA loans and non-VA loans were properly disbursed when in fact they had not. The fraudulent documents were then transmitted via mail to financial institutions. During the course of the scheme, CARMICHAEL transferred a total of $936,991.50 to his private business and personal use.

Atkins stated the charge resulted from a joint investigation conducted by his Atlanta Resident Agency Office and the Federal Bureau of Investigation’s Dothan AL Resident Agency. Assistant United States Attorney Stephen P. Feaga, Montgomery, AL prosecuted the case.