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Montgomery County Man Pleads Guilty in Mortgage Fraud Conspiracy
Submitted Fraudulent Applications to Obtain Loans Totaling Over $2.2 Million

U.S. Attorney’s Office June 12, 2012
  • District of Maryland (410) 209-4800

GREENBELT, MD—Dennis O. Edwards, age 49, of Silver Spring, Maryland, pleaded guilty today to conspiracy to commit bank fraud in connection with a scheme in which he submitted fraudulent loan applications to obtain over $2.241 million to purchase or refinance homes. During the scheme, Edwards was unemployed and received Social Security disability payments of approximately $1,000 a month.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; and Inspector General Steve A. Linick of the Federal Housing Finance Agency.

According to Edwards’ guilty plea, in early January 2006, Edwards purchased a home on Dennis Avenue in Silver Spring, Maryland, claiming on the loan application that he worked as a nurse and as a mover, earning a combined $6,000 a month from both employers. In fact, Edwards was unemployed at the time and received Social Security disability payments of approximately $1,000 a month.

Edwards obtained mortgage loans totaling $342,000, based upon the fraudulent loan application.

A co-conspirator whom Edwards met while he was purchasing the Dennis Avenue property worked as a loan officer for Bank of America.

The co-conspirator arranged for Edwards to purchase a property on Riggs Road in Hyattsville, Maryland, obtaining a loan for $384,750, based upon false information submitted to Bank of America. Edwards never lived at the Riggs Road property. While the co-conspirator and Edwards were trying to sell the unoccupied Riggs Road property, the co-conspirator arranged to refinance the original loan, based upon a loan application that falsely stated that Edwards earned $8,528 a month.

In January 2006, the co-conspirator signed a contract to purchase a residence on Manorstone Lane in Columbia, Maryland, for $1,595,000. To assist in getting financing for the Manorstone Lane property, in March 2006, Edwards agreed to co-sign a loan for the purchase of the property, at the request of the co-conspirator, with the understanding that the residence would be used exclusively by the co-conspirator. The co-conspirator submitted two loan applications in Edwards’ name to a Rockville, Maryland mortgage originator for the purchase of the Manorstone Lane property. Both loan applications falsely inflated the income and assets of Edwards, who at the time had no income other than Social Security disability payments of approximately $1,000 per month. For example, both loan applications stated that defendant Edwards had monthly business income of $37,950 from a fictitious company known as Edwards Consulting. In addition, both applications stated falsely that defendant Edwards intended to make the Manorstone Lane property his primary residence. The loan applications were subsequently approved as follows: first trust financing for $1,196,250 and second trust financing for $319,000. On May 3, 2006, at a title company in Rockville, Maryland, Edwards signed the necessary documents. The deed transferred title to both Edwards and the co-conspirator, but only defendant Edwards signed the promissory notes. Edwards admitted that, given his limited income, he was not qualified to borrow in excess of $1.5 million and that by signing the documents, he was facilitating a fraud on behalf of the co-conspirator.

Eventually, the loans on the Manorstone Lane property went into default.

To forestall foreclosure, the co-conspirator sent a $12,082.90 cashiers check to the mortgage company in June 2008.

In 2010, outside parties offered to buy the Manorstone Lane property for $970,000, provided that the bank agree to a “short sale” which would have required the bank to release its liens and suffer an immediate loss in excess of $625,000.

To encourage the bank to accept the short sale, another of Edwards’ co-conspirators drafted a letter, dated June 21, 2010, which Edwards signed, stating that “[t]he main reason that [he] fell behind [in payments] is a severe medical issue...chronic/terminal restricted lung disease,” falsely implying that Edwards’s medical disability had occurred after he obtained the loans.

In fact, Edwards was already unemployed and receiving Social Security disability payments when he obtained the loans.

Edwards faces a maximum sentence of 30 years in prison followed by five years of supervised release. U.S. District Judge Peter J. Messitte scheduled his sentencing for September 10, 2012 at 9:30 a.m.

The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention, and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the task force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available at www.justice.gov/usao/md/Mortgage-Fraud/index.html.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

United States Attorney Rod J. Rosenstein praised the special agents of the FBI and the Federal Housing Finance Agency Office of Inspector General for their work in this investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Gregory R. Bockin and Sujit Raman, who are prosecuting the CASE.

source: FBI

David Saks

Time&Temp Memphis

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Comment balloon 0 commentsDavid Saks • June 12 2012 04:18PM


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