David Saks: July 2011

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

Four In Michigan Indicted for Wire and Mortgage Fraud Scheme

Four Indicted for Wire and Mortgage Fraud Scheme

U.S. Attorney's Office
Western District of Michigan

GRAND RAPIDS, MI-Kevin Lee Grady Sr., 47, of Grand Rapids, Michigan, and Lisa Lynn Walters, 42, of Wayland, Michigan, were indicted by a federal grand jury for conspiracy to commit wire fraud and for commission of wire fraud in conjunction with certain mortgage loans, U.S. Attorney Donald A. Davis announced today. Grady faces an additional charge in the indictment for making a material false statement to a Special Agent of the FBI in connection with the mortgage fraud investigation.

Also facing charges in the indictment are: Jimmy Ladell Collins, 40, of Grand Rapids, Michigan, for bank fraud; and Carlus Demond Bridgeforth, 39, of Grand Rapids, Michigan, for wire fraud.

The indictment alleges that Grady, formerly the manager of a local Grand Rapids mortgage brokerage office, and Walters, formerly a licensed residential appraiser, conspired together and with others, to commit, and did commit, wire fraud in conjunction with numerous mortgage loans obtained from private mortgage lenders for home purchasers in 2005 and 2006.

The indictment alleges that Grady fixed prices with prospective sellers and that Walters then appraised the properties at inflated values requested and predetermined by Grady, rather than at their true market value.

Grady then secured financially unqualified buyers to purchase the homes at the fraudulently inflated values. In return for their agreement to buy, Grady and other coconspirators under his direction, promised the purchasers cash kickbacks, often as much as $10,000 per property. The cash payments were most often made to the purchasers after the sale of the property and were unknown to the lenders. This fraudulent conduct resulted in the creation of false equity in the properties because the loans sought and received by the buyers were in amounts substantially greater then what the sellers had previously agreed to accept for the properties.

Grady compounded the fraud by submitting or causing to submit loan applications to lenders on behalf of the purchasers' that contained materially false information relating to the purchasers' true financial status. This false information included, highly inflated salaries or simply fictitious employments, grossly exaggerated net worths, false sources of down payments for the loans and various other false financial representations. By submitting such flagrantly false loan applications Grady and other coconspirators were able to convince lenders to make loans they would otherwise have rejected and which eventually ended in default and resulted in substantial losses for the lenders.

Once a loan was approved and the sale was completed Grady and other co-conspirators shared in the falsely created equity-surplus mortgage loan proceeds, with the largest portion going to Grady. Grady and the coconspirators also used a portion of the surplus loan proceeds to pay the promised kickbacks to the purchasers. All of this fraudulent conduct was done without the lenders' knowledge or consent.

The indictment alleges that Bridgeforth and Collins were purchasers who bought several homes through Grady and received kickbacks for participating in his mortgage fraud scheme.

Grady and Collins face a maximum penalty of 30 years' imprisonment, and a maximum fine of $1,000,000, if convicted of bank fraud. Grady and Walters face a maximum penalty of 20 years' imprisonment, and a maximum fine of $250,000.00, if convicted of conspiracy or wire fraud. Bridgeforth similarly faces a maximum penalty of 20 years' imprisonment and a maximum fine of $250,000.00 if convicted of wire fraud.

The investigation was conducted by the Grand Rapids Office of the Federal Bureau of Investigation. The prosecution is being handled by Assistant U.S. Attorneys Ron Stella and Brian Delaney.

The charges in the pending indictment are only allegations of criminal conduct, and the defendant is presumed innocent unless and until his guilt is established in court by proof beyond a reasonable doubt.

Courtesy FBI

David Saks

Time&Temp Memphis

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Comment balloon 0 commentsDavid Saks • July 01 2011 01:54PM
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