David Saks: Tax Preparer, Homebuilder, and Bank Executive Sentenced for Roles in Mortgage Fraud Scheme Involving Luxury Homes

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Tax Preparer, Homebuilder, and Bank Executive Sentenced for Roles in Mortgage Fraud Scheme Involving Luxury Homes

Department of Justice Press Release
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For Immediate Release
April 6, 2011
United States Attorney's Office
Southern District of Ohio
Contact: (937) 225-2910

Tax Preparer, Homebuilder, and Bank Executive Sentenced for Roles in Mortgage Fraud Scheme Involving Luxury Homes

CINCINNATI-Four more participants in a mortgage fraud scheme involving luxury homes in the Cincinnati area have been sentenced in U.S. District Court here for their crimes. Seven people have now been sentenced as a result of the investigation.

Carter M. Stewart, United States Attorney for the Southern District of Ohio; Ohio Attorney General Mike DeWine; Warren County Prosecuting Attorney David P. Fornshell; Keith L. Bennett, Special Agent in Charge, Federal Bureau of Investigation (FBI); Daniel M. McDermott, U.S. Trustee, Region 9; and other Cincinnati Mortgage Fraud Task Force participants today announced the sentences imposed by U.S. District Judge Timothy S. Black.

Eric D. Duke, 36, of Cincinnati, was sentenced today to 60 months in prison and ordered to pay $2,094,609.50 in restitution and forfeiture in the same amount. Duke pleaded guilty on September 14, 2010 to three counts of conspiracy and four counts of lying to a bank ("loan fraud"). Duke was a self-employed tax preparer and interior designer. He also owned a property management company called Rivendale Property Management Group, L.P., in Maineville, Ohio. Duke admitted that he fraudulently obtained more than $6 million in mortgages for four luxury homes by filing fraudulent loan applications in the names of others.

Bernard J. Kurlemann, 57, of Mason, was sentenced on Friday, April 1 to 24 months in prison and ordered to pay $1,115,409.50 in restitution for his role in the scheme in which he was able to walk away from $3.5 million in mortgage debt and in addition receive $500,000 in seller's proceeds. His restitution order is based on the amount the lenders lost as a result of the fraud.

A jury convicted Kurlemann on November 11, 2010 following an approximate three-week trial on one count of conspiracy to commit loan fraud or lying to a bank and two counts of loan fraud (lying to a bank) in connection with the false statements Kurlemann made on purchase contracts and settlement statements when selling two of his companies' luxury homes to straw buyers. The jury also convicted Kurlemann of bankruptcy fraud and other crimes connected with lying in his filings in Kurlemann Builders, Inc.'s (KBI) bankruptcy.

Terrence J. Monahan Jr., 36, of Cincinnati, a bank executive who ran the Exclusive Capital Management group at Huntington National Bank and participated in a loan fraud scheme in order to sell his Maineville house, was sentenced April 1 to 18 months in prison, fined $5,000 and ordered to pay $264,000 in restitution. Monahan pleaded guilty on October 28, 2010 to one count of making false statements on documents submitted to the U.S. Department of Housing and Urban Development (HUD).

Others involved in the scheme include:

Bryan Sanneman, 38, of Mason, owner of Sanneman Homes, Inc. Sanneman pleaded guilty on September 3, 2010 to two counts, conspiracy to commit loan fraud or lying to a bank and loan fraud (lying to a bank). He was sentenced on February 8, 2011 to 12 months and one day in prison and ordered to pay $369,000 in restitution.

Pam Sanneman, 62, of Mason, a former Sibcy Cline realtor and mother of Bryan Sanneman pleaded guilty on March 25, 2010 to one count of misprision of felony for knowledge of her son's crime and failure to report it. She was sentenced on February 8, 2011 to three years' probation, the first six months to be served on house arrest.

Two of the straw buyers also pleaded guilty to charges connected with their roles in the scheme. Christopher Gagnon, 37, of Florence, Kentucky, pleaded guilty to loan fraud. He was sentenced on February 8, 2011 to one day of time served and three years of supervised release. He was also ordered to pay $930,000 in restitution. Francisca Webster, 46, of Cincinnati, was sentenced today, also to one day of time served and three years of supervised release. Webster pleaded guilty to conspiracy to commit wire fraud.

The charges were the result of a two-year investigation by the Greater Cincinnati Mortgage Fraud Task Force.

Stewart commended the investigation by the Greater Cincinnati Mortgage Fraud Task Force. The Greater Cincinnati Mortgage Fraud Task Force is a multi-agency, multi-jurisdictional initiative dedicated to combating the mortgage fraud problem in the Southern District of Ohio.

The case was prosecuted by Assistant United States Attorney Jennifer C. Barry and Special Assistant United States Attorney Bruce A. McGary of the Warren County Prosecutor's Office.

courtesy Federal Bureau of Investigation




David Saks



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Comment balloon 3 commentsDavid Saks • April 06 2011 06:42PM

Comments

I am glad, people are paying for their crimes...there are a lot more that need to be behind bars.

Posted by Nancy Larson (I am a licensed referral agent in NJ) over 9 years ago

Tax preparer/decorater might be a red flag.  The problem is that only a handful of neer do wells get caught, much less sentenced.  Their books are an indecipherable jumble. 

White collar crime is harder to investigate, and the FBI outsources researchers.  Forensic audits are a club that negotiators are using to secure loan modifications and eliminate the 1099 in short sales.  We will be seeing a lot more of it.

Posted by Mary Jo Quay, I Move You Home (EXP Realty ) over 9 years ago

 

Outstanding!

Now if we had a nationwide crackdown we'd be able to clean house and start all over again.

I'm glad to see these types of actions taking place.

No mention here about whether or not all these fools lost their liscenses and if they were banned from doing this type of business ever again.

Thanks for this blog!

Posted by Art Hademan (Century 21 Real Estate Center) over 9 years ago

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