The defendants pleaded guilty to one count of conspiracy to commit mail and wire fraud. They were charged on December 23, 2011, and entered their pleas before United States District Court Judge Paul A. Magnuson.

In their plea agreements, the defendants admitted that from 2007 through 2008, they obtained money loan proceeds under fraudulent pretenses on behalf home buyers associated with an unnamed investment group. Boler owned Team Access, a licensed mortgage brokerage, and worked as a loan officer at that brokerage. Mathis owned Trend Title and closed residential real estate transactions.

Both admitted using the U.S. mail and commercial carriers, as well as interstate wire transfers, during the course of the scheme.

The loss to victim lenders because of their criminal wrongdoing is between $7 million and $20 million.

To further this conspiracy, Boler prepared mortgage loan applications to secure residential mortgage loans for buyers involved in an investment group managed by a person known in court documents as Individual A. Boler admitted making false representations on those applications, including inflating the incomes of buyers and failing to disclose that buyers would receive cash kickbacks from mortgage loan proceeds.

In total, Boler secured mortgage loans for the purchase of approximately 108 properties.

For her part, Mathis admittedly closed approximately 88 fraudulent transactions for the investment group, specifically concealing from mortgage lenders the fact that property purchasers received kickbacks from mortgage loan proceeds and that the buyers were often not the source of the “cash to close.”

The kickbacks were disguised as prepaid management fees and facilitator fees.

In addition, Mathis closed between eight and ten transactions in the Cloud 9 development, which also involved undisclosed buyer kickbacks.

For their crimes, the defendants face a potential maximum penalty of 20 years in prison.

Judge Magnuson will determine their sentences at future hearings. This case is the result of an investigation by the U.S. Postal Inspection Service and the Federal Bureau of Investigation and is being prosecuted by Tracy L. Perzel.

This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. It includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and, with state and local partners, investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

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CoreLogic reports that the three-day meeting is a unique, member-driven forum that invites lenders responsible for more than 80 percent of U.S. mortgage originations to discuss emerging mortgage fraud trends, interact with industry experts and share best practices. The Consortium is a cooperative initiative of the industry's top mortgage lenders formed for the purpose of jointly understanding, detecting, and preventing mortgage fraud more effectively than each lender can individually.

Rachel Dollar is the editor of the Mortgage Fraud Blog, an acclaimed website for news and information on mortgage fraud and real estate fraud throughout the United States. Ms. Dollar will speak on the ongoing challenges of short sale fraud along with contractual provisions and litigation strategies to help attendees better define their approach to fraud loss recourse. She will also provide insight on recently litigated fraud cases.

"There is great value in lenders sharing data, information, and insights to identify common fraud trends," commented Rachel Dollar, Esq., CMB, of Smith Dollar PC. "The CoreLogic Mortgage Fraud Consortium creates a secure forum for lenders to converse openly about pressing fraud issues. This is a very positive initiative for the mortgage origination industry as a whole because lenders, investors and consumers all benefit from better fraud management."

CoreLogic (NYSE: CLGX) is a leading provider of information, analytics and business services.  "As the industry leader in fraud technology, data and analytics, our goal is to ensure lenders are well-informed about emerging mortgage fraud trends and equipped to effectively mitigate those risks. At this meeting, we will demonstrate the industry's newest fraud prevention technology that enables lenders to leapfrog forward in their detection efforts. We will also provide attendees with an exclusive preview of our Mortgage Fraud Prevention Best Practices Study detailing lenders' fraud prevention processes in origination and servicing," stated Tim Grace, senior vice president of Data & Analytics Product Management at CoreLogic. "The results highlight strengths in key process areas as well as identify actionable gaps where criminals may potentially find opportunities." The complete study will be released by the end of first quarter.

Additional guest speakers include Jerome Mayne, a convicted real estate criminal who will share his journey from CEO to prison in a presentation entitled, "Fraud & Consequences," and Tim Gallagher, FBI section chief for Financial Crimes and the National Program Manager of the FBI's White Collar Crime Program. In addition to the external speakers, five lenders will lead interactive presentations on the application of tools and techniques to:

Valuation fraud; Collusion and internal fraud; Origination fraud; Strategic default patterns; and Fraud patterns in loan application data.

The Mortgage Fraud Consortium was founded in 2008 and is the only national group of its size that offers complimentary membership along with member-driven data usage policies. Members represent more than 80 percent of the U.S. mortgage originations market and have agreed to contribute their loan application and fraud outcome data in exchange for quarterly fraud reporting, analytics and access to CoreLogic consortium-based mortgage fraud products. Members of the Mortgage Fraud Consortium have contributed more than 90 million loan applications to date and are adding millions more each year.

Lenders can learn more about the Mortgage Fraud Consortium by contacting their CoreLogic sales representative or visiting www.corelogic.com to contact sales.

About CoreLogic

CoreLogic (NYSE: CLGX) is a leading provider of consumer, financial and property information, analytics and services to business and government. The Company combines public, contributory and proprietary data to develop predictive decision analytics and provide business services that bring dynamic insight and transparency to the markets it serves. CoreLogic has built one of the largest and most comprehensive U.S. real estate, mortgage application, fraud, and loan performance databases and is a recognized leading provider of mortgage and automotive credit reporting, property tax, valuation, flood determination, and geospatial analytics and services. More than one million users rely on CoreLogic to assess risk, support underwriting, investment and marketing decisions, prevent fraud, and improve business performance in their daily operations. The Company, headquartered in Santa Ana, Calif., has more than 5,000 employees globally. For more information visit www.corelogic.com.

For each of the two counts of making false statements to an FDIC-insured financial institution, they each face a maximum penalty of 30 years in federal prison.

Sentencing hearings for both Joel and Vernon are scheduled for April 16, 2012.

On February 23, 2011, a federal grand jury returned a thirteen-count indictment charging Joel, Vernon, and their co-conspirator, Elton Lassiter, with a mortgage fraud scheme perpetrated on ten different lenders. The evidence presented at trial showed that in early 2006, operating under the auspices of Joel’s company Investor’s Outlet, Inc., Joel and Vernon recruited co-conspirator Jill Jackson to purchase ten residential properties during a ten-week period of time.  Joel and Vernon recruited Jackson, in part, because she had a good credit rating. 

However, Jackson’s weekly take-home pay of $300 to $400 as a call-center supervisor was insufficient to justify the purchase of one property, much less ten properties that, collectively, cost more than $1.8 million. Notwithstanding Jackson’s financial inability to afford these ten properties, Joel and Vernon enlisted the assistance of Lassiter, who was a loan processor. Lassiter facilitated the acquisition of loans from ten different lenders for each of the ten properties. 

The loan applications sent to the lenders included false information ranging from Jackson’s gross monthly income to her intent to occupy all of the homes as her primary residence.  Joel profited from this fraud scheme by arranging payoffs to Investors Outlet, Inc., at closing, for phantom repairs to the properties.  Joel admitted, to investigators, that no repairs were ever done to these properties.  After or contemporaneous with the closings, Joel kicked-back fraud proceeds to Vernon and Jackson either through Investors Outlet, Inc. or by authorizing the title agents to send funds directly to them.  Ultimately, Vernon drained Jackson's bank accounts of the fraud proceeds she had obtained for her participation in this scheme.  Vernon used these funds to purchase a luxury car and clothing.

Both Elton Lassiter, 45, Oxford, Florida, and Jill Jackson, 35, St. Petersburg, Florida, previously pleaded guilty for their participation in this scheme.  Lassiter was sentenced to 33 months in federal prison. The sentencing hearing for Jackson is scheduled for February 7, 2012.

U.S. Attorney Robert E. O'Neill announced the jury verdict.

This case was investigated by the Federal Bureau of Investigation.  It is being  prosecuted by Assistant United States Attorneys Simon Gaugush and James Muench.

According to the plea agreement, by at least April 2008, through October 2008, Lowell conspired with others to defraud mortgage lenders by providing false information in HUD-1 settlement statements.  As part of the scheme, Lowell paid home buyers to participate in the fraud. 

Lenders were led to believe that buyers made down payments at closing, when in fact, the buyers made no down payment and were paid money outside of closing for buying the home. 

As a result, Lowell and others caused the mortgage lenders to collectively provide unqualified loan applicants in excess of $1,000,000 towards the purchase of six residential properties. 

Most of the properties have been foreclosed upon, which resulted in losses to the mortgage lenders.

United States Attorney Robert E. O'Neill announced the guilty plea.

This case was investigated by Office of Inspector General-Housing and Urban Development. It is being prosecuted by Assistant United States Attorney Jesus M. Casas.

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Helton participated in at least 102 fraudulent mortgage bailout transactions and more than a dozen fraudulent bankruptcies in 2004 and 2005.  He was ordered to pay more than $3.2 million in mandatory restitution to various lenders and financial institutions that were not repaid by the borrowers or fully recovered through subsequent foreclosure sales.

Helton was sentenced by U.S. District Judge Samuel Der-Yeghiayan in Federal Court in Chicago.  He was ordered to begin serving his sentence in June 2012.

Helton and two co-defendants, Charles White, 43, Chicago, Illinois, and Felicia Ford, 39, also of Chicago, were convicted of multiple fraud counts following a five-week trial in June and July 2010.  White was sentenced late last year to more than 22 years in prison, while Ford is awaiting sentencing next month. 

White owned and operated Eyes Have Not Seen (EHNS), which purported to offer insolvent homeowners mortgage bailout services that would prevent them from losing their homes in foreclosure by selling their property to third-party investors for whom the defendants fraudulently obtained mortgage financing.  The victim-clients were assured they could continue living in their homes rent and mortgage-free for a year while they attempted to eliminate their debt and repair their credit.  EHNS misled clients concerning the operation of the purported program. 

In particular, victim-clients were not told that their homes were, in fact, being sold to third parties and that ENHS would strip their homes of any available equity at the time of sale, which EHNS did.  Instead, ENHS clients were told that they were only temporarily transferring their homes and would preserve their ownership rights. 

Helton was recruited by White to represent EHNS participants at the real estate transactions it orchestrated.  The victim-clients typically met Helton for the first time at the closings at which they sold their homes.  Helton worked to placate individuals who questioned the program and to dissuade them from retaining independent legal advice.  He received above-market legal fees for appearing at closings at which he did little more than guide victim-clients through the paperwork that sold their homes with EHNS receiving all of the profits from the sale.  Helton further used the ENHS real estate closings to recruit prospective bankruptcy clients, informing them that bankruptcy would serve as a component of the bailout program.  Helton subsequently filed more than a dozen bankruptcy petitions for victim-clients that omitted any reference to their recent EHNS property sales.

In addition to participating in EHNS's bailout program, Helton attempted to implement his own mortgage bailout program through Diamond Management of Chicago, Inc., a foreclosure avoidance company comparable to EHNS.  Helton marketed Diamond's bailout program and his bankruptcy services as part of a "credit repair" system.

Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, announced the sentence with Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Barry McLaughlin, Special Agent-in-Charge of the U.S. Housing and Urban Development Office of Inspector General in Chicago; and Thomas P. Brady, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago.  The U.S. Trustee Program, a Justice Department component that oversees administration of bankruptcy cases and private trustees, also  assisted in the investigation.

The government is being represented by Assistant U.S. Attorneys Joel Hammerman and Mark E. Schneider.

The case is part of a continuing effort to investigate and prosecute mortgage fraud in northern Illinois and nationwide under the umbrella of the interagency Financial Fraud Enforcement Task Force, which was established to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  For more information on the task force, visit: www.StopFraud.gov

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Vulpis pleaded guilty on November 4, 2011.

According to court documents, from May 2007 through December 2007, Vulpis, who was then employed as a loan officer of Wachovia Bank, Tampa, Florida, played a role in 12 residential real estate transactions in Hillsborough and Pasco Counties, Florida.  All of the transactions involved fraud. 

With respect to 11 of the real estate transactions, Vulpis, in his capacity as an officer of Wachovia Bank, caused the submission of false and fraudulent loan applications to Wachovia Bank.  Specifically, Vulpis knew that the income of the applicants stated on all 11 loan applications was materially inflated.  As to 10 of these real estate transactions, he knew that the applicants failed to qualify for the particular Wachovia Bank loan program.

In four instances, Vulpis caused the disbursement of loan proceeds to his co-conspirator, who was the seller of the subject properties.

In one of the real estate transactions, which took place on December 28, 2007, Vulpis purchased a residential property owned by a co-conspirator - residence located at 7326 Sheffield Road, Tampa, Florida 33615.  The sales price was $200,000, and Vulpis applied for a $180,000 mortgage loan from the Bank of America. 

In the loan application, Vulpis falsely inflated his income and assets, as well as the amount of money that he would contribute toward the down payment.  A co-conspirator provided Vulpis with the money for the down payment, but neither Vulpis nor the co-conspirator disclosed to the Bank of America, a FDIC-insured institution, the fact that the co-conspirator was the source of the down payment.

Co-conspirator Sang Min Kim pleaded guilty on June 15, 2010 and was sentenced to 41 months imprisonment. Another co-conspirator, Francisco Acevedo, Jr., pleaded guilty for his role on September 9, 2011, and is awaiting sentencing.

U.S. Attorney Robert E. O'Neill announced the sentence.

This case was investigated by the Federal Bureau of Investigation.  It was prosecuted by Assistant United States Attorney Rachelle DesVaux Bedke.

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According to the Indictment:

Defendants David Drake and Donald Snider, Jr., through Northshore Investments, LLC, entered into an arrangement with another person to purchase Tract 34, Indian Ridge, Branson, Missouri, for $3,260,000.  The defendants began seeking "investors" to obtain loans for the purchase of Tract 34.

Drake and Snider entered into an arrangement with the operators of My Investing Place (MIP), a company located in Salt Lake City, Utah. Under the arrangement, MIP obtained individuals, referred to as "credit-partners" to "invest" in the purchase of lots in Tract 34 and the construction of condos and houses in Indian Ridge, which were to be built by Western Site Services (WSS). MIP was given a $5,000 commission for each loan in which they provided the borrower.

In addition to agreeing to locate "credit-partners," one principal with MIP agreed to act as a credit-partner himself, taking out loans for four properties in Indian Ridge. The credit-partners obtained construction loans in their names and were told they would not have to repay the loans and they would receive approximately $10,000 per loan. The credit-partners were also told they would not have to pay a down-payment for the loan, or make any of the loan payments. The credit-partners purchased the lots for $135,000 each from Northshore.

The defendants never informed the credit-partners that Northshore was controlled by defendants Drake, Snider, and Gibbs. Persons who agreed to be "credit-partners" applied for construction loans, which were funded by Columbian, Wells Fargo, and Lawrence Bank. At least 51 such loans were obtained. Columbian held 28 notes, Wells Fargo held 16, and Lawrence Bank held 7.

Defendant James B. Clarkson was a mortgage broker with Top Flight Mortgage. Drake and Snider used Clarkson to broker the credit-partner loans for the Indian Ridge project. Clarkson assisted the credit-partners by putting together loan applications that were submitted to the bank.

In the loan applications submitted to Columbian and Wells Fargo, Clarkson falsely listed the loan broker as "Shawn Johnson" because Clarkson was not licensed as a mortgage broker in Missouri or Kansas.

In some of the Indian Ridge project loan applications defendant Clarkson submitted, Clarkson stated the borrowers made more money than they actually earned, to ensure the borrower qualified for the loan.

Columbian, Wells Fargo, and Lawrence Bank relied upon the information in the loan applications submitted by Clarkson in determining whether to approve the loans for the Indian Ridge Project.

The defendants caused letters to be sent to Wells Fargo and Lawrence Bank stating credit-partners had paid an initial down payment, which was a false statement because no down payments were actually made.

WSS was supposed to construct the buildings on Tract 34, Indian Ridge. To fund the construction, WSS was required to submit invoices after work was completed. The invoices were referred to as "loan draws."

WSS submitted invoices for loan draws for work that was either never performed, or the invoices grossly overstated the true value of the work.

For instance, WSS submitted loan draws for $8,258,565.93, which is approximately 76% of the total loans funded by Columbian. However, only 13 of the 28 properties with notes held by Columbian had any work performed on the property. None of the 28 properties were completed.

Defendant Victoria Hall set up CMH, which was purported to be a manufacturer of modular constructed buildings. However, as it related to the Indian Ridge project, CMH was used for the sole purpose of submitting false invoices. Drake and Hall submitted invoices for modular buildings allegedly provided by CMH for the Indian Ridge project, however, no modular construction was used at Indian Ridge Tract 34.

The proceeds from the loan draws were submitted by the banks to WSS. Defendant Heather Gibbs deposited the funds into a WSS account.

Instead of being used to pay for expenses related to the Indian Ridge project, the defendants used the loan money for personal expenses and business expenses for projects not related to the Indian Ridge project.

All of the Indian Ridge loans were defaulted upon. 

Columbian failed as a financial institution on August 22, 2008, and the loans it issued related to the Indian Ridge project were placed in receivership.

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