United States: District Court: District of Nevada

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Yale University EliScholar – A Digital Platform for Scholarly Publishing at Yale YPFS Documents Browse by Media Type 9-8-2010 Examples of Significant Mortgage Fraud Cases 2001-2010 United States: District Court: District of Nevada Follow this and additional works at: https://elischolar.library.yale.edu/ypfs-documents Recommended Citation United States: District Court: District of Nevada, "Examples of Significant Mortgage Fraud Cases 2001-2010" (2010). YPFS Documents. 5843. https://elischolar.library.yale.edu/ypfs-documents/5843 This Document is brought to you for free and open access by the Browse by Media Type at EliScholar – A Digital Platform for Scholarly Publishing at Yale. It has been accepted for inclusion in YPFS Documents by an authorized administrator of EliScholar – A Digital Platform for Scholarly Publishing at Yale. For more information, please contact elischolar@yale.edu. District of NevadaExamples of Significant Mortgage Fraud Cases 2001-2010USA v. Lloyd Gardley et al. Case No. 2:10-cr-00236-GMN-LRL On May 26, 2010, Lloyd Gardley, Candis Gardley, Suzanne McAllister, Arcell Mitchell, Jr., andSharon Wagner were indicted by the federal grand jury on mortgage fraud charges. From about2005 to April 2007, the defendants are accused of devising a mortgage fraud scheme involvingstraw buyers and the submission of false information to financial institutions in order to obtainmortgage loans.  Between August 25, 2005, and April 18, 2007, the defendants are alleged tohave been involved in 28 fraudulent real property sales transactions involving 21 homes sold inLas Vegas.  Seven of the homes were "flipped" or sold twice within short periods of time.  Themajority of the homes sold for more than $700,000, and the total value of the mortgages for the28 transactions was $18.9 million.  The defendants are pending trial. USA v. Michael Capodici, et al.Case No. 2:10-cr-00281-KJD-PALOn June 16, 2010, Michael Capodici, Linda Marie Kot, Jeffrey Palladino, and Michael Blairwere indicted by the federal grand jury on mortgage fraud charges. From about August 2005 toMay 2006, the defendants are accused of devising a mortgage fraud scheme involving strawbuyers and the submission of false information to financial institutions in order to obtainmortgage loans. The defendants are alleged to have been involved in 12 fraudulent real propertysales transactions involving nine homes sold in Las Vegas. The homes were either flipped - soldtwice within a short period of time - or were the subject of foreclosure. The majority of thehomes sold for more than $600,000, and the approximate value of the mortgages for the 12transactions was $8 million. The defendants are pending trial. USA v. Brett Depue et al. Case No. 2:10-cr-00121-RLH-RJJ On March 10, 2010, Brett Depue, owner/operator of numerous now-defunct Nevada investmentcompanies, and two of his former employees, Brian Barney and Maria Ornelas were indicted bythe federal grand jury on mortgage fraud charges. From about February 1, 2005, to May 31, 2007,in Nevada and elsewhere, the defendants allegedly participated in a mortgage fraud conspiracy inwhich they used "third party disbursements" and "double escrow" methods to fraudulently obtainmonies from the financial institutions. The Indictment specifically discusses 17 homes in LasVegas and Henderson which were purchased fraudulently between April 2005 and April 2007.The defendants are pending trial. USA v. Calway Cauley et al. Case No. 2:08-cr-00288-PMP-RJJ On February 19, 2010, following a four-day jury trial, Calway Cauley was convicted ofconspiracy to commit mail fraud; mail fraud; conspiracy to commit wire and bank fraud; and twocounts of bank fraud. Cauley used straw buyers to obtain mortgages to purchase houses inNevada and California, causing lenders to lose between $200,000 and $400,000. Four co-defendants also charged in the scheme pleaded guilty: William Ervin, Ladon McClellan, JoyceWilturner, and Truemeatra Warner.  USA v. Steven Grimm et al. 2:08-cr-00064-RLH-GWF Eve Mazzarella, a Las Vegas real estate broker, her husband, Steven Grimm, and four others,Melissa R. Beecroft, Christina R. Thompson, Amy R. Ortiz, and Jyothi Panikkar, all loan officersand mortgage brokers in Las Vegas are charged with defrauding federally-insured financialinstitutions of millions of dollars through a scheme that involved inflated housing values, strawpurchasers and limited liability companies.  The cases are pending trial. Five other defendants,Daicy Vargas, Benjamin Labee, Shauna Labee, Craig Chrisitians, and Robert Samora, havepleaded guilty. Grimm and Mazzarella allegedly engaged in approximately 432 straw buyertransactions involving approximately 227 properties with a total purchase price of over $107million. Grimm and Mazzarella defaulted on mortgage payments on many of the loans whichcaused the properties to go into foreclosure. At least 143 of the approximately 227 propertiespurchased by the defendants are in default causing losses to the banks estimated at more than $17million.. USA v. John Kenney2:08-CR-287-KJD-PALJohn Kenny was sentenced on September 1, 2009, to 18 months in prison, three years ofsupervised release, and ordered to pay restitution of $245,000 for his guilty plea to conspiracy tocommit mail fraud and bank fraud. Kenny used straw buyers to obtain mortgages to purchasehouses in Nevada and California. USA v. Kenneth Mickens2:07-cr-00304-RCJ-PAL On February 9, 2009, Mickens was sentenced to four months in prison, three years of supervisedrelease and ordered to pay restitution of $38,000 for his guilty plea to making a false statement inloan procurement and aiding and abetting. Mickens operated a Las Vegas company whichassisted persons in procuring loans from various financial institutions. Between July and August2003, Mickens made and caused his employees to make false statements in the loan applicationsof clients concerning their income and employment status.  USA v. Mark Young2:03-cr-00549-RLH-LRL Young was sentenced on March 10, 2006, to 78 months in prison, three years of supervisedrelease, and ordered to pay $457,740 in restitution to HUD.  Young was convicted by a jury inSeptember 2005 of conspiracy (to make false statements) and 32 separate counts of making falsestatements.  During the period May 2000 through June 2002, Young created false loan packetsfor low-income borrowers in the Las Vegas, Nevada area to enable them to obtain mortgages andpurchase homes beyond their means.  The loans were issued by borrowers insured by HUD. Thefalse loan packets included false pay stubs, W-2 forms, verifications of employment, creditreferences, gift letters, and other false information concerning the borrowers’ employment,income, assets, alien status, and credit history.  Young’s conviction was upheld on appeal. USA v. Stefan Crosby et al.2:05-cr-00357-RLH-RJJ On June 30, 2006, Stefan Crosby was sentenced to 21 months in prison, three years of supervisedrelease, and ordered to pay $302,365 in restitution for his guilty plea to conspiracy and HUDfraud.  His brother Lionel Crosby was sentenced on September 8, 2006, to one year and one dayin prison, one year of supervised release, and ordered to pay $92,761 in restitution for his guiltyplea to HUD fraud.  From 2001 to 2003, Stefan and Lionel Crosby conspired to make falsestatements for the purpose of obtaining HUD insured home loans. The defendants recruited“straw buyers” to apply for the loans to purchase residences in the Las Vegas area, knowing thatthe straw buyers did not qualify for the loans. The defendants then created fraudulent documents,such as loan applications and verifications of employment, rent, and identification, and placedfalse information in them to support the loan applications for themselves and the straw buyers. HUD foreclosed on all of the properties and reported losses of over $300,000.USA v. John Everett2:04-cr-00376-JCM-GWF On August 10, 2005, John Everett was sentenced to 27 months imprisonment for his guilty pleato Money Laundering.  Everett and co-conspirators operated several businesses in the Las Vegas, Nevada area which purchased residential real estate properties and renovated them as halfwayhomes for recovering alcoholics.  Everett and his co-conspirators used straw buyers to apply formortgage loans. In most of the applications, the straw buyers used fictitious identities andfraudulent documents, such as loan applications, copies of drivers licenses, pay stubs,employment verifications, credit references, bank information, etc. In addition to the mortgageloan, Everett and his co-conspirators requested additional sums of money, ranging from $25,000to $50,000 to renovate the homes as halfway houses. Everett and his co-conspirators used theseadditional sums of money for their own benefit, including to fund further fraudulent loans. USA v. Beth Lanza et al. 2:01-cr-00137-LRH-PAL On May 17, 2004, three former mortgage company employees who processed fraudulent FederalHousing Authority (FHA) home loans in the Las Vegas area from approximately 1997 to 1999were sentenced. Beth Lanza, a former regional manager and loan officer with Mortgage CapitalResources and National City Mortgage in Las Vegas, was sentenced to 27 months in prison andordered to pay $333,375 in restitution for her guilty plea to one count of Wire Fraud; GaryStephens, also a former loan officer at Mortgage Capital Resources, was sentenced to 10 monthsin prison and ordered to pay $148,249 in restitution for his guilty pleas to making a falsestatement to HUD; and Zina Sagona, of Las Vegas, also a former loan officer at MortgageCapital Resources, was sentenced to two years probation and ordered to pay $197,594 inrestitution for her guilty pleas to conspiracy and making a false statement to HUD. Two otherco-defendants, Michael Cartron and Horace Smith, both former loan officers with MortgageCapital Resources and National City Mortgage, also pleaded guilty and have been sentenced.Cartron was sentenced on May 5, 2004, to 21 months in prison, and Smith was sentenced onOctober 21, 2003, to 37 months in prison. 

Examples of Significant Mortgage Fraud Cases 2001-2010

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Examples of Significant Mortgage Fraud Cases 2001-2010

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