In the following press release U.S. Attorney Jeffrey A. Taylor, Joseph Persichini, Jr., Assistant Director in Charge of the FBI’s Washington Field Office, C. André Martin, Special Agent in Charge of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office, and Thomas E. Hampton, Commissioner of the District of Columbia’s Department of Insurance, Securities, and Banking announced that a 35-year-old District of Columbia man, Duane McKinney, most recently of 1000 10th Street, NE, Washington, D.C., was found guilty today by a jury in the U.S. District Court for the District of Columbia on charges of fraud, theft, and monetary transactions.

Specifically, McKinney was found guilty of four counts of mail fraud, two counts of wire fraud, three counts of first degree theft, and two counts of monetary transactions. McKinney is scheduled to be sentenced on July 15, 2008, before the Honorable Judge Reggie B. Walton. At sentencing, McKinney faces a likely range of imprisonment of 87 - 108 months under the Federal Sentencing Guidelines.

The government’s evidence at trial established that Duane McKinney obtained title to D.C. and Maryland properties through forged deeds, that is, deeds which purported to be signed by the owners transferring the properties to McKinney or his non-profit business. In fact, the deeds were not signed by the owners; the vast majority of the owners were deceased at the time of the forged and false deeds. McKinney was assisted by Joe D. Liles, who would sign his name to these false deeds as the “notary” falsely stating that he saw the owner sign the deeds as grantor and that the owner “personally appeared before him.” Once the deeds were notarized, McKinney caused the forged and notarized deeds to be filed with the District of Columbia’s Recorder of Deeds and the Prince George’s Circuit Court Land Records. McKinney would then sell the properties as if they belonged to him or his non-profit business and would use the money for his own personal desires. McKinney wrongfully obtained approximately 14 properties, nine of which he sold in order to gain for himself more than $770,000.

Liles, of Upper Marlboro, Maryland, pleaded guilty on January 16, 2008, to the charge of false statements. Liles is scheduled to be sentenced on May 30, 2008 before Judge Walton.

In announcing today’s verdict, U.S. Attorney Taylor, Assistant Director in Charge Persichini, Special Agent in Charge Martin, and Commissioner Hampton commended Special Agents Kelly Bender, FBI, and Ronald D. Williams, IRS, and Fraud Investigator Annette D. Beresford, Department of Insurance, Securities, and Banking. They also noted the assistance of Special Agents Brian Smith (FBI), Lori Garner (IRS), Cindy Buskey (DEA), Aaron Ybarra (ATF), and Deena P. Wilson (Social Security Administration, Office of the Inspector General) and Arlington County Police Department members James O’Daniel and Steven Meinke. In addition, they commended paralegal specialists Melanie Howard and Jeanne Latimore-Brown, legal assistant April Peeler, Kimberly Smith, Litigation Support, Assistant U.S. Attorneys William R. Cowden, William B. Wiegand, Diane Lucas, Judith A. Kidwell, former Assistant U.S. Attorney James Flood, and Assistant U.S. Attorney Virginia Cheatham, who prosecuted the case.

In the following press release U.S. Attorney Jeffrey A. Taylor, Special Agent-in-Charge Jeffrey Irvine of the U.S. Secret Service, and Metropolitan Police Department (MPD) Chief Cathy L. Lanier announced today. The conviction was the result of investigative efforts initiated by the D.C. Metro Area Fraud Task Force, a joint area law enforcement initiative that coordinates fraud investigations by federal authorities, including the U.S. Secret Service, and local law enforcement agencies, including MPD announced that Robert G. Davis, a former Federal Emergency Management Agency (FEMA) employee and clerk for various mortgage companies, has pled guilty to stealing personal identification information of over 200 persons, fraudulently opening over $150,000 in credit accounts with various retailers in the names of the victims, and ordering merchandise for himself on these accounts,

Davis, 44, a resident of Southeast Washington D.C., entered his plea of guilty on Friday, April 4, 2008, to one count of wire fraud and one count of aggravated identity theft in U.S. District Court for the District of Columbia before the Honorable Judge Reggie B. Walton. He faces a mandatory-minimum of two years of incarceration and maximum sentence of 32 years of incarceration and a $1,000,000 fine, although Davis is likely to face a sentence of between 51 and 87 months under federal sentencing guidelines. Davis has been held without bond pending his sentencing, which has been set for
June 20, 2008.

According to the Statement of Offense to which Davis pled guilty, between December 2003 and November 2007, Davis stole the identities of over 200 people (“ID Theft Victims”) while working as a clerk at various mortgage companies operating in the District of Columbia area and as a FEMA Human Services Specialist who worked with the victims of natural disasters. Davis stole the identities of the ID Theft Victims without the knowledge of his employers by copying their personal information from loan applications the ID Theft Victims had submitted to FEMA or the mortgage companies. Approximately 30 of the 200 ID Theft Victims had their identities stolen from FEMA, an agency of the Department of Homeland Security after they had submitted their personal information as part of their applications for disaster relief.

After obtaining the ID Theft Victims’ personal information, Davis called various retailers impersonating the ID Theft Victims and fraudulently opened credit accounts in their names. Davis used the identities of at least 74 ID Theft Victims to open accounts with The Home Shopping Network, Ginny’s Inc., Shop NBC, QVC, Inc. (collectively, “Retailers”), and he fraudulently obtained credit with these Retailers in excess of $156,257. Impersonating the ID Theft Victims, Davis fraudulently ordered dozens of items that were delivered to his home, or other addresses near his home. The items ordered by Davis included gold and diamond jewelry, designer watches, digital cameras, DVDs, Dyson vacuum cleaners, gourmet food (including steaks, lobster, and seafood), lingerie, clothing, jackets, DVD players and other electronic items. After obtaining these items, Davis would either keep them for personal use or pawn them at pawnshops in and around the Washington, D.C. area. Between December 2003 and November 2007, Davis pawned dozens of items and obtained over $24,084 in cash from the pawnshops in exchange for the items he fraudulently obtained from the Retailers.

In announcing the guilty plea, U.S. Attorney Taylor, U.S. Secret Service Special Agent-in-Charge Irvine, and Chief Lanier praised the hard work and persistence of the investigative agents involved in this matter, especially Special Agent Daniel Sperco of the U.S. Secret Service, and MPD Detective Richard Espinosa. They also acknowledged the efforts of Legal Assistant Michael Thompson, as well as Assistant U.S. Attorney Tejpal S. Chawla who prosecuted this matter.

In the following press release the FBI in Washington, D.C. announced that George A. Cowser pled guilty on September 27, 2007 to engaging in a fraud scheme in which he obtained money by selling or offering to sell homes he did not own in the District of Columbia, U.S. Attorney Jeffrey A. Taylor, Joseph Persichini, Jr., Assistant Director in Charge of the FBI’s Washington Field Office, and Guy J. Cottrell, Inspector in Charge, U.S. Postal Inspection Service, Washington Division, announced today.

Cowser, 60, of the 1700 block of Gales Street, N.E., entered his plea at a hearing today in U.S. District Court of the District of Columbia before the Honorable Judge James Robertson. During the plea hearing, Cowser admitted that the government had sufficient evidence to convict him of the fraud scheme and to forfeit a vehicle he had purchased with proceeds from the scheme. He also acknowledged that the government could prove that the intended loss to victims from the scheme was over $1,000,000. Cowser, who pled to all the counts in the indictment, faces up to 110 years in prison under the federal and local fraud statutes when sentenced later this year, but likely will face up to 87 months of imprisonment under the Federal and D.C. Sentencing Guidelines.

According to the indictment to which defendant pled guilty, between May of 2005 and March of 2006, Cowser devised a scheme to defraud owners of property, individual buyers, and a mortgage company, among others, and obtain money and property from these owners, buyers and the mortgage company by means of false and fraudulent pretenses, representations, and promises. The purpose of this scheme was for Cowser to sell or attempt to sell real estate property in the District of Columbia that he claimed to own personally, or in the name of a company he formed, Reverse Properties, Inc. Neither Cowser nor Reverse owned these properties, had an independent claim of ownership to these properties, or had any contract to sell these properties for the true owners. Even though Cowser knew he did not own these properties, he signed sales contracts, and closed on the transfer of D.C. real estate properties for significant personal profit at the expense of the true owners, defrauded buyers, and financial institutions.

As part of the scheme, Cowser profited, and caused real estate property to be transferred to him or Reverse. Specifically, Cowser used a forged deed to claim ownership of a home in the 1300 block of West Virginia Avenue, N.E. He attempted to sell the property to three separate individuals, obtaining money from all three, and actually engaging in two separate closings on a sale to two separate persons in the same week in February of 2006. As a result of these two closings, over $540,000 was given to Cowser or a corporate designee of Cowser. Cowser used some of these proceeds to purchase a 2006 Mitsubishi Outlander XL.

Cowser also attempted to fraudulently sell at least two other houses to buyers, one in the 1200 block of Orren Street, N.E., and the other in the 1300 block of W Street, S.E. He did so by signing fraudulent quit claim deeds and recording the quit claim deeds with the D.C. Recorder of Deeds. He then obtained money from the purported buyers, unbeknownst to the true owners. The sales did not successfully close, however, because the fraud regarding the West Virginia Avenue property, discussed above, became known. Nevertheless, the purported buyers were not able to recover all of their money that they had given to Cowser and the owner of one of the properties had her personal property damaged, including antique furniture, when it was moved out of her house without her knowledge during the attempted sale.

Moreover, Cowser was on release to the community pending trial with a condition of not engaging in similar fraudulent sales of real estate. Shortly before his trial, however, Judge Robertson ordered Cowser taken into custody based on Cowser’s allegedly engaging in such sales while on release.

In announcing today’s guilty plea, U.S. Attorney Taylor, Assistant Director Persichini and Inspector in Charge Cottrell praised the hard work of the investigative agents involved in this matter, especially FBI Special Agent Mary Soudrette and Postal Inspector Jeremy Wiesel. They also acknowledged the efforts of Legal Assistant Teesha Tobias, as well as Assistant U.S. Attorneys Tejpal Chawla and Daniel Butler, who are prosecuting this matter, and AUSA Diane Lucas, who is handling the forfeiture action against the proceeds and resulting vehicle obtained by Cowser.

Resources:
Press Release

In the following press release from Washington, D.C., U.S. Attorney Jeffrey A. Taylor and Joseph Persichini, Jr., Assistant Director in Charge of the FBI’s Washington Field Office, announced that a federal judge has ordered 293 months of prison time — more than 24 years — for a former loan officer who was found guilty by a jury of all eight counts of an Indictment charging conspiracy, bank fraud, wire fraud, and money laundering, Charles E. Hall, Sr., 37, most recently of Accokeek, Maryland, was sentenced today in the U.S. District Court for the District of Columbia before the Honorable Sterling Johnson, Jr., sitting by designation from the Eastern District of New York. Judge Johnson, finding that “the community must be protected from Mr. Hall, who is a predator,” sentenced the defendant to 293 months in prison, restitution of $5,045,460, a money judgment of $1.6 million, and three years of supervised release following imprisonment.

The government’s evidence at trial established that Charles Hall organized a conspiracy to “flip” over 30 residential properties in the District of Columbia; a scheme which netted $5.2 million for Charles Hall and caused a loss to the banks of over $5 million. From 2002 to 2003, Hall and others targeted Washington, D.C. homes for “flip sales” or quick resales at fraudulently inflated prices. Hall recruited people to act as the “straw buyers,” people who would have the property in their names, but would not pay the down payments or the mortgages. Hall worked as a loan officer for Guaranty Residential Lending (GRL), and through this position he submitted loan applications for these straw buyers seeking approximately $14 million in loans to purchase the properties; these loan applications falsely listed the straw buyers’ assets, income, and other information.

Hall paid co-defendant Robbie Colwell (due to be sentenced in the new year) to write dishonest appraisals falsely reporting the conditions of the properties and stating that the properties were renovated when, in fact, they were not. Colwell, who was not even a licensed appraiser, stole actual appraisers’ names and licenses to write completely fabricated reports on the value of the houses. The appraisals almost uniformly claimed an “overall complete rehabilitation and remodeling of entire home” and that “the subject property has a new roof, windows, new kitchen, bathrooms, new floor,” or “the subject property has been recently renovated and has a modern kitchen.” In reality, the properties were in terrible shape – none had renovated kitchens or bathrooms; many had crumbling walls and ceilings; and one was merely a shell, with no interior walls or floors at all. These fraudulently inflated appraisals, which dramatically overstated the value of the properties, caused the banks to loan out a much higher mortgage based on a much higher sales price. Colwell pleaded guilty to conspiracy to commit bank fraud and is facing sentencing on December 13, 2006.

The banks’ underwriters approved the loans. In the beginning of the scheme, co-conspirators Marcus Wiseman (sentenced to 5 years probation on 12/11/06) and Susan Conner (due to be sentenced in the new year) worked as underwriters at GRL, the same bank which employed Charles Hall. The underwriters’ job was to safeguard the bank’s money. They were to review the loan applications, the appraisals, and the title histories to ensure that the collateral supported the loan and that the borrowers were able to repay the mortgage. If they approved the loan, they would put conditions on the sales such as requiring that the buyers make a down payment, that is, a financial interest, in the properties to secure the mortgage.

The underwriters failed to do their job. Susan Conner approved loans which did not meet the banks’ requirements; she approved the inappropriate loans because Charles Hall paid her money to do so. Marcus Wiseman accepted payments from Charles Hall in exchange for reviewing the loans more quickly than other loans. Later, Wiseman and Conner both left GRL and went to a competitor, National City Mortgage (NCM). Instead of turning to another GRL-employed underwriter to approve his loans, Hall took his business away from his employer (through a loan broker) and to the competitor NCM where Wiseman and Conner again approved his loans and again; in return, Hall paid them money. Wiseman or Conner approved every one of the 32 loans listed in the Indictment. Marcus Wiseman and Susan Conner both pleaded guilty and are facing sentencing on December 11, 2006 and December 20, 2006, respectively. Wiseman pleaded guilty to a misdemeanor of improperly accepting payments as a bank officer and Conner pleaded guilty to bank bribery.

By using the false loan applications, the inflated appraisals, and the fraudulently obtained underwriting, Charles Hall and the co-conspirators caused the banks to issue loans to the straw buyers in amounts that were much more than the properties were actually worth, thus creating a large amount of illegal proceeds when the properties were “flipped” to the buyers. Co-conspirator Alan R. Davis (and later another person doing business under the name “Network Venture Capital”) purchased the properties, and, many times on the same day, quickly resold the “flipped” properties to the straw buyers at the price of the inflated appraisals. In this manner, a huge amount of money was generated for the co-conspirators. In one day, a single property could produce between $150,000 and $400,000 of cash for the conspiracy; these amounts are based on the difference between the sales price Davis or Network Venture Capital paid for the property and the sales price created when the property was resold to the straw purchaser and justified by the false appraisal. Alan Davis pleaded guilty to conspiracy to commit bank fraud and is scheduled to be sentenced later today, December 8, 2006.

Most of the electronic Court records are not available for these cases but I was able to find details of 4 examples of the level of the fraud:

929 7 Street, N.E. purchased on November 18, 2002 for $238,000 and resold on the same day for $500,000, more than double the first sales price

224 P Street, N.W. purchased on May 13, 2003 for $245,000 and resold on the same day for $550,000, a difference of $300,000

3508 16 Street, N.W. purchased on December 6, 2002 for $357,500 and resold four days later on December 10, 2002 for $675,000, a difference of more than $300,000

504 G Street, N.E. purchased on October 3, 2002 for $260,000 and resold on the same day for $660,000, a difference of $400,000.

Co-conspirator Vicki Robinson (due for sentencing on 1/18/07) was the settlement agent on all or virtually all of 32 loans financed by GRL or NCM. As the settlement agent, Robinson’s job was to comply with the banks’ instructions, collect money, and disburse the proceeds. However, Vicki Robinson followed Hall’s directions on how to conduct the closings and settlements of the property sales. Even though Hall was not the seller and not the one entitled to the profit, Robinson allowed Hall to decide who should get paid from the loan money (in fact, she even signed over $45,000 of the banks’ loan money to Passport BMW to buy a car for Hall). After each sale, Robinson gave a portion of the bank’s loan money to either Davis or (more often) Hall with the instructions that they convert the money into a cashier’s check in the exact amount that the straw purchaser was to bring as “cash from borrower” to the settlement table, in order to support the fiction that the buyer was bringing his/her own money to the table as a “down payment.” Using this scheme, the co-conspirators tricked the banks into loaning enormous mortgages grossly in excess of the actual value of the properties. Vicki Robinson pleaded guilty to conspiracy to commit bank fraud and is scheduled to be sentenced on December 15, 2006.

Charles Hall received the majority of the ill-gotten gains, that is, $5.2 million of the loan proceeds. At times this money to Hall or his company was identified on the settlement statements as reimbursement for “rehab construction,” when in truth, no renovations had been performed and little if any rehab was ever performed on the properties. Instead, Hall used the money to live a lavish lifestyle, to pay off the co-conspirators, and to fund the continuation of the conspiracy. The mortgages on all but one of the 32 properties defaulted and foreclosed or sold before foreclosure for a loss. The banks resold the properties (in a strong real estate market) but still sold the properties for less than the amount of the mortgage loans. After reselling the properties, the banks were left holding mortgage loans in excess of the value of the properties. After resale, the banks were still left with a loss in excess of $5 million.

In announcing the sentence, U.S. Attorney Taylor and Assistant Director in Charge Persichini commended Special Agent Joseph Gordon of the Federal Bureau of Investigation for his work in the investigation and prosecution of the case. In addition, they gave special commendation to a Special Agent from Department of Housing and Urban Development’s Office of Inspector General — Ronnyne Bannister, who testified as an “expert” witness, and they commended Legal Assistant April Peeler, Paralegal Specialist Jeanie Latimore-Brown and former Paralegal Specialist Paula Pagano, former Auditor Nicholas Novak, former Litigation Support Supervisor Deborah Dunn and Litigation Support Specialist Thomas Royal, and Assistant U.S. Attorney Virginia Cheatham.

Update on Friday, January 12, 2007 at 04:06PM by The Editor - Ian Shuter

The US DOJ in Washington DC announced that Robbie L. Colwell, 34, most recently of McLean, Virginia, was sentenced today in the U.S. District Court for the District of Columbia before the Honorable Gladys Kessler. He received a prison sentence of 46 months. Judge Kessler ordered that the defendant pay restitution in the amount of $5,045,460. The Court also placed the defendant on three years of supervised release following his release from prison.

Update on Thursday, January 25, 2007 at 08:21PM by The Editor - Ian Shuter

On January 17, 2007 Alan Davis was sentenced to 10 months imprisonment and order pay restitution of over $742,000. Please click here to read the DOJ’s Press Release.

In a press release the US DOJ in Washington DC announced that the President of Douglas Development Corporation and two high level employees have been indicted by federal grand jury on conspiracy, bribery, fraud and tax evasion charges. One of the fraud charges relates to:

Fraud in a Mortgage Disbursement

Douglas Jemal, Norman Jemal and Blake Esherick are charged with engaging in a scheme to defraud a mortgage company, Mortgage Capital, Inc., by falsifying documents submitted to the mortgage company which resulted in the fraudulent release of $430,000 in loan proceeds directly to Douglas Jemal for his and Norman Jemal’s personal use and benefit, rather than to a third party vendor as required by the mortgage.

In announcing today’s indictment, United States Attorney Wainstein, FBI Assistant Director Mason, Inspector General Willoughby and IRS Special Agent in Charge Raven commended City Councilmember Jim Graham for uncovering evidence of possible favoritism by Lorusso toward certain contractors during City Council hearings held by the Councilmember in 2003. They also thanked the city government for the assistance and cooperation it provided throughout this investigation. Lastly, they praised the work of FBI Special Agents David McClelland and Thomas Chadwick; District of Columbia Inspector General Agent Larry Carr; Special Agents of the Internal Revenue Service, Criminal Investigation; legal assistant Lisa Robinson, and Assistant United States Attorney Mark H. Dubester, who will be prosecuting this matter.

An indictment is merely a formal charge that a defendant has committed a violation of criminal laws. Every defendant is presumed innocent until and unless found guilty.

Please click here to read the indictment
Please click here to read the full, 5 page, US DOJ press release which gives details of all of the charges.

United States Attorney Kenneth L. Wainstein and Michael A. Mason, Assistant Director in Charge of the FBI’s Washington Field Office, jointly announced that Reginald Jerome Rogers, 51, who is an attorney licensed in the District of Columbia, with an office in Bowie, Maryland, was arraigned today before U.S. Magistrate Alan Kay on mail fraud charges returned in a 13-count indictment by a federal grand jury last week. If convicted, the defendant faces a maximum of 20 years in prison and a fine of $250,000 and restitution of all victim losses. The indictment also seeks forfeiture of $513,928, an amount alleged to be the proceeds of the mail fraud.

Part of the indictment alleges that Rogers forged the signature of an unnamed client in order to obtain a $125,000 mortgage loan on a property owned by his client.

Click here to read the indictment

According to the indictment, Rogers practiced from his home office in Bowie, Maryland, and handled the financial affairs of elderly clients and their estates in the Washington area. The indictment alleges that, among other things, between 1998 to the present, Rogers: 1) induced elderly clients to turn over control of their funds and property to him as their fiduciary, which he thereafter unlawfully diverted for his personal expenses without their knowledge and consent; 2) transferred funds between the elderly clients’ accounts to conceal his diversions; and 3) concealed his scheme by making false statements to elderly clients’ regarding the status of their funds and property.

US DOJ Press Release - Friday, March 11, 2005

Washington , D.C. - United States Attorney Kenneth L. Wainstein and Michael A. Mason, Assistant Director in Charge of the Washington Field Office, Federal Bureau of Investigation, announced that Robbie L. Colwell, 32, of the 300 block of Kentucky Avenue, SE, Washington, D.C., pleaded guilty today in U.S. District Court before the Honorable Gladys Kessler to conspiracy to commit bank fraud. A further status hearing is scheduled for June 2005. Under the Federal Sentencing Guidelines, Colwell could face 37 to 46 months in prison.

This plea brings the total number of guilty pleas in this bank fraud conspiracy to five. Earlier, on November 5, 2004, Alan R. Davis, 42, of the 5000 block of Drake Place, SE, Washington, D.C., pleaded guilty to conspiracy. On December 1, 2004, Vicki A. Robinson, 48, of East End Drive in Curtis Bay, Maryland, pleaded guilty to conspiracy. On December 3, 2004, Marcus T. Wiseman, 34, of Whitebark Court, Upper Marlboro, Maryland, pleaded guilty to a misdemeanor charge of improperly receiving payments as a bank employee. On December 10, 2004, Susan M. Conner (formerly Susan Shelton), 42, of Scarlet Oaks Drive, LaPlata, Maryland, pleaded guilty to receiving bribes as a bank employee.

In December 2004, a federal grand jury indicted Colwell and a co-conspirator with conspiracy to commit bank fraud, bank fraud, and wire fraud. The indictment also charged the co-conspirator with conspiracy to launder monetary instruments and contained a forfeiture count. The co-conspirator still awaits trial on his charges.

According to the indictment, the co-conspirator and others identified approximately 32 District of Columbia homes that would be targeted for “flip sales” or quick resales at fraudulently inflated prices. The co-conspirator recruited people to act as the “straw buyers,” people who would have the property in their names, but not be paying the down payments or the mortgages. The co-conspirator, who at the time was a loan officer for a mortgage company, submitted loan applications for these straw buyers seeking approximately $14 million in loans to purchase the properties; these loan applications falsely listed the straw buyers’ assets (such as real estate owned and earnest money deposit) and falsely stated other information (such as marital status and intention to live in the properties).

At today’s hearing, Colwell admitted that he wrote false appraisals and inaccurately reported the conditions of the properties, stating that the properties were renovated when, in fact, they were not. Through the use of these fraudulently inflated appraisals, which dramatically overstated the value of the properties, the lenders paid a much higher mortgage based on a much higher price. The indictment states that the co-conspirator obtained approval for these mortgage loans by paying money bribes to underwriters to approve loan applications which did not meet the requirements of the lenders’ loan programs and to approve loans quickly.

By using the false loan applications, the fraudulently inflated appraisals, and the fraudulently obtained underwriting, the co-conspirator and Colwell caused the lenders to issue loans to the straw buyers in amounts that were more than the properties were actually worth, thus creating a large amount of illegal proceeds when the properties were “flipped” to the buyers. Alan R. Davis and others purchased the properties, and, at times on the same day, quickly resold the “flipped” properties to the straw buyers at the price of the inflated appraisals. The proceeds for each “flip” sale, which represented the difference between the amount the co-conspirator Davis and others paid for the property and the amount that the straw buyer “agreed” to pay for the property (which was supported by the fraudulently inflated appraisal), ranged anywhere from approximately $150,000 to $400,000 per property.

According to the indictment, Vicki Robinson, acting as a settlement agent, was also involved in the conspiracy. At settlement, Robinson disbursed the loan money to co-conspirator and Alan R. Davis without first receiving the “cash from borrower.” The co-conspirator and Davis used a portion of the loan money to pay the “cash from borrower” by purchasing cashiers’ checks so it would appear as though the straw buyers paid their own money as part of the purchase price.

The co-conspirator received about $5.3 million of the loan proceeds. This $5.3 million was largely identified as money for “rehab construction,” when in truth, little if any renovations were performed on the properties; instead, according to the indictment, the co-conspirator used the money to live a lavish lifestyle, to pay off the co-conspirators, and to fund the continuation of the scheme. The mortgages on all but one of those properties have been defaulted and foreclosed or sold before foreclosure for a loss. The lenders have resold the properties for less than the mortgage loans, and, as a result, have lost in excess of $4.6 million.

The Mortgage Bankers Association (MBA) is holding summit entitled “Protecting the Real Estate Finance System: Combating Mortgage Fraud Against Lenders.” on Thursday, March 10, 2005 at 9:00 a.m. - 10:00 a.m. at The Mayflower Hotel, 1127 Connecticut Avenue, N.W., Washington, D.C.

The real estate finance industry has proven to be a backbone of the United States economy, and homeownership is one of the keys to wealth for most American families. Yet the fraudulent acts of a few can threaten the stability of the system for all. Fraud against mortgage lenders can be financially devastating to lenders and to consumers alike.

This opening session, will provide attendees with background on this issue from a variety of perspectives - consumer, industry and law enforcement.

The goal of the summit is to develop a series of industry recommendations to combat fraud against mortgage lenders. The opening panel will provide the context for further discussion during breakout sessions in the afternoon, where the recommendations will be developed. A report summarizing these recommendations will be distributed to all attendees in the days following the summit.

Additionally, during the opening panel, MBA will unveil a new tool designed to help lenders identify, prevent and combat fraud against mortgage lenders.

Speakers are Chris Swecker Assistant Director, Criminal Investigative Division (CID), Federal Bureau of Investigation and Ann Fulmer President, Georgia Real Estate Fraud Prevention & Awareness Coalition (GREFPAC).