David Saks: MEMBERS OF BANK FRAUD RING SENTENCED IN $3.7 MILLION SCAM INVOLVING HELOCS

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MEMBERS OF BANK FRAUD RING SENTENCED IN $3.7 MILLION SCAM INVOLVING HELOCS

Members of Bank Fraud Ring Sentenced in $3.7 Million Scam

U.S. Attorney’s Office April 27, 2012
  • Northern District of Georgia (404) 581-6000
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ATLANTA—After three days of hearings, United States District Judge William S. Duffey, Jr. today concluded the sentencings of six co-conspirators involved in a $3.7 million dollar bank fraud ring involving home equity lines of credit (HELOCs). Among those sentenced were two of the ringleaders: Otis Bernard Livingston, 44, of Gulfport, Mississippi; and Dionne Michelle Whitted, 37, of Castle Hayne, North Carolina; a prolific straw borrower, Shalena Sutherlin, 27, of Douglasville, Georgia; a forger of false financial documents, Todd Ivery, 43, of Kennesaw, Georgia; former bank employee, Hung Quoc Nguyen, 30, of Buford, Georgia; and a recruiter, Catasha Browning, 36, of Douglasville, Georgia.

“This fraud scheme, like so many, was based on greed and lies,” said United States Attorney Sally Quillian Yates. “The conspirators designed an insidious scam to target banks and local home owners by using homes to secure loans, many times without the owners’ knowledge. We remain committed to safeguarding our financial institutions and their customers from such financial predators.”

According to United States Attorney Yates and information presented in the public record: Between 2006-2007, Whitted operated a company known as “Mastermind Events” in Conyers, Georgia, which was supposed to host seminars, including foreign currency exchange (FOREX) trading training events. Livingston and Whitted, the leaders of the conspiracy, recruited so-called “straw” borrowers, including Sutherlin, who would present themselves to banks as if they were the true owners of property, when, in fact, they were acting without the knowledge of the true owner and were funneling the proceeds back to the schemers. Eventually, Sutherlin evolved beyond a straw borrower to become the president of Mastermind Events, working with Livingston and Whitted on recruiting still more straw borrowers, obtaining false financial documents, submitting the financial information to the banks, and dealing with both bank employees and the straw borrowers.

During the course of the conspiracy, Whitted, Livingston, and Sutherlin made various misrepresentations to convince other straw borrowers to apply for home equity lines of credit (HELOC). Most of these misrepresentations centered on the notion that the defendants’ lucrative FOREX trading business would generate more than enough returns to repay all of the loans along with profits for all. This was a lie, and most of the loans went into default.

The fraudulent activity of the coconspirators was extensive.

Whitted and Sutherlin forged quit claim deeds on 18 different residential parcels of property which belonged to home owners, some of whom were unaware of the scheme. Whitted and Sutherlin submitted the deeds along with false financial information in support of applications for 25 HELOCs with Wachovia, Bank of America, and Washington Mutual and received in excess of $3.7 million dollars. Whitted and Sutherlin purchased false financial documents, including tax returns, W-2s, and pay stubs–from Ivery and submitted them to the banks on behalf of the straws. Whitted, Sutherlin, and Livingston also bribed Nguyen, a former Bank of America employee, to facilitate more than $1.4 million worth of fraudulent HELOCs, giving him cash, meals, a resort gift card, and diamond rings. Working with Whitted, Browning recruited a straw borrower to obtain over $380,000 in fraudulent HELOCs. None of the straw borrowers had valid title to the properties.

Over the course of the sentencing hearings, Judge Duffey imposed the following sentences:

Whitted was sentenced to five years, two months in prison to be followed by five years of supervised release, during which she must perform 150 hours of community service, and she was ordered to pay $3,486,508.46 in restitution.

Livingston was sentenced to five years, 11 months in prison to be followed by five years of supervised release, during which he must perform 150 hours of community service, and was ordered to pay $2,956,043.97 in restitution.

Ivery was sentenced to four years, seven months in prison to be followed by five years of supervised release, during which he must perform 100 hours of community service, and was ordered to pay $1,662,425.69 in restitution.

Sutherlin was sentenced to two years, 10 months in prison to be followed by five years of supervised release during, which she must perform 75 hours of community service, and was ordered to pay $2,040,638.67 in restitution.

Nguyen was sentenced to two years, six months in prison to be followed by five years of supervised release, during which he must perform 150 hours of community service, and was ordered to pay $1,425,896.19 in restitution.

Browning was sentenced to one year, two months in prison to be followed by three years of supervised release during which she must perform 60 hours of community service, and was ordered to pay $360,026.43 in restitution.

Livington, Whitted, Sutherlin, and Ivery previously pleaded guilty to making false statements to federally insured banks in connection with obtaining HELOCs. Nguyen pleaded guilty to receiving two diamond rings worth over $8,000 as a reward for facilitating a series of fraud loan applications for HELOCs while he was a senior personal banker at Bank of America. Browning pleaded guilty to conspiracy to commit bank fraud and make false statements to federally insured banks.

This case was investigated by special agents of the Federal Bureau of Investigation and United States postal inspectors.

Assistant United States Attorneys David Leta and Nick Oldham prosecuted the case.

source: FBI



David Saks



Time&Temp Memphis

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Comment balloon 0 commentsDavid Saks • April 27 2012 03:45PM

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