Ex-Mortgage Broker Sentenced to Federal Prison for Mortgage Fraud Scheme
|FBI Phoenix November 29, 2012|
On November 26, 2012, Michele Marie Mitchell, 45, was sentenced by U.S. District Judge James A. Teilborg to a term of 30 months in federal prison, restitution of $110,490, and three years of supervised release. Mitchell pleaded guilty in April, 2012 to conspiracy to commit wire fraud.
Mitchell and an associate, Jeremy West Pratt, were indicted by a federal grand jury in June 2011. Pratt pleaded guilty in January 2012 to conspiracy to commit wire fraud and was sentenced by Judge Teilborg on July 30, 2012, to six months of imprisonment and three years of supervised release.
Mitchell held herself out to be a mortgage broker, loan officer, and real estate investor.
She did business at an office on East Vista Bonita Drive in Scottsdale. Pratt was the president of Arizona Cooling Control Plus Inc. and involved in construction and remodeling work. Mitchell and Pratt recruited people with good credit scores to act as straw buyers to ostensibly purchase one or more properties as investments. Mitchell and Pratt enticed the straw buyers by offering to pay a kickback of up to $15,000 per property or to make the mortgage payments until the property could be resold for a profit or both. In addition, the defendants submitted false loan applications and supporting documents to induce lenders to fund loans and at the close of escrow enriched themselves by directing a portion of the loan proceeds, or “cash back,” to a company which one of them controlled.
Between October 2005 and February 2007, Mitchell obtained mortgage financing for 17 properties and induced lenders to fund approximately $17 million dollars in loans. Pratt aided Mitchell’s efforts in eight of the 17 properties that are located in Glendale, Scottsdale, Surprise, Peoria, Goodyear, and Phoenix.
The defendants failed to make the mortgage payments as promised, and each of the 17 properties went into foreclosure.
The investigation was conducted by agents of the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation. The prosecution was handled by the United States Attorney’s Office.