David Saks: Mortgage Broker and Ex-Wife Sent to Prison for Fraud

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

Mortgage Broker and Ex-Wife Sent to Prison for Fraud

Mortgage Broker and Ex-Wife Sent to Prison for Fraud

Rodney D. Wells, 44, Atlanta, Georgia, was sentenced by United States District Judge Julie E. Carnes to federal prison, on charges of mortgage fraud and tax evasion. His former wife, Tracie Wells, formerly known as "Tracie Williams," 46, Douglasville, Georgia was also sentenced on a charge of tax evasion.   

Rodney D. Wells was sentenced to 2 years, 9 months in prison to be followed by 3 years of supervised release, and ordered to perform 40 hours of community service.  Tracie Wells was sentenced to 6 months of home confinement and an additional 2 years and 6 months of probation. Rodney D. Wells and Tracie Wells pleaded guilty to the charges on December 17, 2009.

According to the charges and other information presented in court:  In approximately 2002, Rodney D. Wells worked as a mortgage broker through two companies he created, "Manhattan Group Mortgage" and "Superior Funding Group," and obtained financing for buyers of properties on which he had placed fraudulent liens.  The fraudulent liens were placed on the properties by Rodney D. Wells using another fictitious business, a purported construction company known as "Tenacity Construction."  Through this fake business, Rodney D. Wells prepared and submitted fraudulent invoices and placed liens on property for work that was never actually done on those properties. 

Then, to qualify prospective buyers for loans, Rodney D. Wells prepared and submitted to lenders false appraisals inflating the price of homes and fraudulent information regarding the prospective buyer's finances including, false verifications of assets on deposit, false information regarding the source of down payment funds and a false representation that the purchaser intended to live in the property as their primary residence. Lending institutions then issued loans relying on the fraudulent information submitted by Rodney D. Wells.

When the lenders distributed loan proceeds at the loan closing, the fictitious construction business operated by Rodney Wells received money to pay off the fraudulent liens. Through this scheme, Rodney D. Wells pulled out approximately $400,000 for himself from the sale of the homes. Eight properties were identified in the indictment, one being a refinance of the personal residence of Rodney Wells.  After the closings, Rodney Wells and Tracie Wells moved the proceeds of the fraudulent lien and mortgage scheme through various bank accounts, including Tenacity Construction, in an attempt to hide the income from the Internal Revenue Service.

Rodney D. Wells and Tracie Wells conspired to avoid paying income taxes on the monies earned through the mortgage fraud scheme.  Using the mortgage companies "Manhattan Group Mortgage" and "Superior Funding Group" as well as the shell construction company, Tenacity Construction, the couple generated substantial income between 2002 and 2004.  Profits from the businesses were funneled to Tracie Wells who used the monies to purchase numerous personal assets, including a new home and luxury vehicles, purchased in her name only. 

Rodney D. Wells and Tracie Wells filed tax returns which under-reported their income, and therefore they owed additional taxes.  Rodney D. Wells also made false statements to investigators with the Internal Revenue Service when asked about Superior Funding Group.

This case was investigated by Special Agents of the Internal Revenue Service, Criminal Investigation.

Assistant United States Attorney Susan Coppedge prosecuted the case.

United States Attorney Sally Quillian Yates announced the sentences and said of the case, "This mortgage broker represents part of the reason why the housing market is broken--fraud. Various fraud schemes have cheated legitimate homeowners out of their very own homes, and in many cases the criminals gutted whatever is left. This defendant cheated and lied to mortgage lenders by inflating the value of homes and making false statements in mortgage applications so he could pull money out of the homes to enrich himself. Whether it be individuals or large institutions, the housing market is not a neighborhood for criminals."

"While tax evasion is always illegal and always wrong, it is absolutely despicable during a time of massive federal deficits,"  said Reginael McDaniel, Special Agent in Charge of IRS Criminal Investigation. "When people evade their taxes, not only does the deficit grow, but honest Americans end up having to pay more." 

David Saks

Time&Temp Memphis

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Comment balloon 0 commentsDavid Saks • August 17 2011 01:50PM


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