Two Conspirators Sentenced in Baltimore Reservoir Hill Neighborhood Mortgage Fraud Scheme
Approximately $1 Million Loss
|U.S. Attorney’s Office November 12, 2013|
BALTIMORE—U.S. District Judge George L. Russell, III sentenced Kimberly Eileen McMillian, a/k/a Kimberly Simmons and Kimberly Simmons McMillian, age 46, of Baltimore, today to two years in prison, followed by five years of supervised release, for wire fraud in connection with a fraud scheme involving more than $1 million in fraudulently obtained mortgages.
Judge Russell sentenced co-defendant Glenroy E. Day, Sr., age 73, of Oxon Hill, Maryland, to two years’ probation, with the first year to be served in home confinement, and as a special condition ordered Day to perform 200 hours of community service during his second year of probation. Judge Russell entered an order that McMillian and Day pay $1,028.003.20 and $540,000 in restitution, respectively.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Special Agent in Charge Brian Murphy of the United States Secret Service-Baltimore Field Office.
According to her plea, in 2007, McMillian told a man who had bought three houses in Baltimore and had finished renovations on two of them that she had clients from the New York area who were interested in purchasing the properties. When he agreed to sell, McMillian submitted loan application packages to a loan officer at a mortgage corporation in connection with the three properties, as well as a fourth property. The four loan application packages were subsequently approved.
The government’s investigation revealed that virtually all the information submitted in the four loan packages was false. In two cases, the purported buyers were individuals who had already returned to their home countries or planned to do so in the near future; the other two “buyers” listed on the loan applications were either stolen or fictitious identities. In none of the four cases was there a real individual who actually intended to live in the properties and make the mortgage payments on them. Moreover, the representations made and the supporting documentation provided on each loan application relating to the employment, income, and financial assets for each purchaser were likewise false.
McMillian arranged to have Day, an unlicensed appraiser, prepare the appraisal reports on all four properties because she knew he would provide an appraisal at the specific contract price without regard to the actual condition or value of the property.
For two properties located at 2243 Madison Avenue and 2359 McCulloh Avenue, Day admitted that he falsely represented that both properties had been recently upgraded and renovated. Day further admitted that these two appraisals also included interior photographs that were actually taken in completely different and thoroughly renovated houses. Day’s appraisals indicated that each of the four appraisals had been reviewed and approved by a licensed appraiser, but the individual specified has denied that he saw or reviewed any of the four appraisals.
Based on the false information provided relating to the four “buyers” and the condition and market value of the properties, the mortgage company agreed to extend financing on each of the four properties, totaling $1.094 million in all.
McMillian received a total of approximately $278,000 from the four transactions at the closings, although she in turn transferred $122,000 of the settlement proceeds to another individual and an associate’s business checking account. Day received approximately $2,000 that he had charged for preparing the four appraisals.
Following the closings, the mortgage on each property soon went into default.
Typically, either no mortgage payments were made at all, or only a couple of payments were made.
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 www.justice.gov/usao/md/Mortgage Fraud/index.html.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein praised the FBI and U.S. Secret Service for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Jefferson M. Gray, who prosecuted the case.