Final 2 Defendants Sentenced for Mortgage Fraud Scam
Kevin Grady Sr ., 48, Grand Rapids, Michigan, was sentenced for wire fraud, bank fraud and making false statements to the FBI and Edward Hessie Sumrell, 55, Grand Rapids, Michigan, was sentenced for making a false statement to the FBI.
As previously reported on Mortgage Fraud Blog, during 2005 and 2006, Grady managed the Grand Rapids office of Sure Financial, a mortgage brokerage business owned and licensed by another individual. The government proved at trial that Grady, and loan officers working at his direction, obtained inflated appraisals and fixed prices with sellers. Grady enticed financially unqualified buyers to purchase the homes by promising them kickbacks of $5,000 to $10,000 per property after the closings. Grady defrauded the mortgage lenders by submitting loan applications that misrepresented the buyers’ places of employment, employment income, assets, and other pertinent information. Grady and his loan officers created or obtained false pay-stubs, residential leases, tax documents, verifications of employment, and other documentation that were submitted to the lenders to make it appear that the information on the loan applications was truthful. Some of these counterfeit documents were prepared and provided by Sumrell, who was convicted by the jury of lying to the Federal Bureau of Investigation regarding his association with Grady’s office.
Evidence submitted at trial proved that, in less than one year, Grady defrauded mortgage lenders in excess of two million dollars and personally pocketed over $500,000 of the fraudulently obtained loan proceeds, some of which was then used to pay kickbacks to the buyers. Grady also defrauded Key Bank in conjunction with a million dollar loan that he used to pay off the building on East Paris Avenue, Grand Rapids, Michigan where he operated the fraudulent mortgage loan business and Grady Group Properties.
Hon. Robert J. Jonker stated that Grady’s significant sentence was attributable not only to his blatant and pervasive pattern of fraud, but also to his abusive behavior directed at individuals that he needed to carry out the fraud and who were vulnerable to his intimidation.
Judge Jonker ordered Grady to pay $3,000,000 in restitution to the lending institutions and he agreed to forfeiture in the amount of $1,181,332. “Mortgage fraud will continue to be vigorously investigated and prosecuted by this Office. Pervasive mortgage fraud schemes do not just victimize the mortgage lenders, they victimize our entire community by manipulating the true value of real estate through falsely inflated appraisals, followed by inevitable foreclosure sales at below-market values,” said U.S. Attorney Donald A. Davis.
Seven other individuals, including a convicted licensed appraiser and a convicted closing agent, testified for the government at the trial of Grady and Sumrell in February of this year.
The Grand Rapids office of the FBI investigated the case, and Assistant U.S. Attorneys Ron Ste.
source: Mortgage Fraud Blog