David Saks: OKLAHOMA MAN SENTENCED TO MORE THAN THREE YEARS IN PRISON FOR DEFRAUDING LENDERS

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

OKLAHOMA MAN SENTENCED TO MORE THAN THREE YEARS IN PRISON FOR DEFRAUDING LENDERS

Man Sentenced for Defrauding Lenders

Derrick Reuben Smith, 47, Midwest City, Oklahoma, was sentenced by United States District Judge Timothy D. DeGiusti to serve forty months in federal prison for his role in a conspiracy to commit wire fraud in connection with mortgage loans. 

In addition, Judge DeGiusti ordered that Smith serve two years of supervised release following his imprisonment and pay restitution of $369,355.54.

Smith was convicted after a jury trial in April 2011.  The evidence showed that he recruited two individuals to buy two new homes in the Raintree Acres Addition, Edmond, Oklahoma, in mid-2006 and early 2007.  The homes sold for $425,000 and $435,000.  The builder of both homes – Dodson Custom Homes, LLC – agreed that T&T Realty, a real estate brokerage operated by Trina Tahir, would receive large commissions and bonuses totaling $51,950 and $77,950.  After the closings, T&T Realty wrote checks to Michael Gipson, an agent at T&T Realty, for $27,059.86 and $58,000.  Gipson then wrote checks in those same amounts to "MP Service," a business that Smith operated. 

In short, Smith induced lenders to fund mortgages based on inflated real estate prices and misrepresented the distribution of excessive loan proceeds to himself as commissions and bonuses paid to T&T Realty.  The houses ultimately went into foreclosure.  Each sold for over $100,000 less than the inflated loans that Smith had the buyers receive.

At the sentencing hearing, Judge DeGiusti heard evidence concerning a third house in the Raintree Acres Addition that was part of Smith's scheme.  The evidence showed that Dodson Custom Homes sold this property to Smith's wife for $465,000.  Dodson then rented the house from MP Service, Smith's company, for approximately $5,000 per month.  After the house went into foreclosure, it sold for only $330,000.

Smith's two co-defendants entered guilty pleas before trial.  On March 30, 2011, Michael Gipson pled guilty to conspiracy and money laundering related to the Raintree Acres properties that were at issue in Smith's trial.  On April 6, 2011, Trina Tahir pled guilty to money laundering in connection with a property that Gipson purchased in May of 2006. Tahir and Gipson will be sentenced in the coming weeks for their participation in this scheme. Each faces a maximum punishment of twenty years in prison and a fine of $500,000, in addition to restitution and forfeiture.

Sanford C. Coats, United States Attorney for the Western District of Oklahoma, announced the sentence.

This sentence is the result of an investigation conducted by the Criminal Investigation Division of the Internal Revenue Service and the Federal Bureau of Investigation.  The case is being prosecuted by Assistant U.S. Attorneys Scott E. Williams and Chris M. Stephens.

Reference is made to public filings for further information.

Courtesy Mortgage Fraud Blog




David Saks



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Comment balloon 2 commentsDavid Saks • September 07 2011 02:29PM

Comments

Good! It's these kinds of scams and criminal fraud that have contributed to our current economic and professional situation. Unfortunately, not nearly enough of the guilty parties have been convicted. I do not believe in rewarding bad behavior and applaud the justice system for persuing these crimes. 

Posted by Norma Wall, Broker, Plano, Frisco, Allen, McKinney Texas (North Point Realty) over 8 years ago

Thanks for your comment, Norma.

Posted by David Saks ((retired)) over 8 years ago

This blog does not allow anonymous comments