"It is often said that home ownership is the American dream. Far too often these dreams are stolen and hopes are dashed through predatory schemes perpetrated by selfish and greedy fraudsters who victimize the innocent simply to enrich themselves. We will continue to investigate such fraudulent activities and aggressively prosecute those who unlawfully manipulate financial institutions, “stated United States Attorney John E. Murphy.
The U.S. Justice Department handed down indictments against more than 1,000 individuals, including 29 people in the Western District of Texas, as part of a nationwide effort to crack down on mortgage fraud across the country.
Justice Department officials filed charges against these individuals under Operation Stolen Dreams, an investigation organized by President Obama’s interagency Financial Fraud Enforcement Task Force. Nationwide, the federal government arrested nearly 500 people in connection with mortgage fraud and handed down indictments against 1,200 individuals.
"These types of crimes create a significant loss of tax revenue, drive buyers into foreclosure, leave lenders burdened with bad loans and neighborhoods with abandoned and deteriorating properties. IRS CI is committed to pursuing individuals who create such havoc," stated William "Bill" Cotter, Acting Special Agent in Charge of the Internal Revenue Service-Criminal Investigation in San Antonio.
The apparent ring leader Robert Brooks, 43, his wife, Cheryl Brooks, 41, Lantana, Texas, along with 20 other individuals, have been charged with conspiring to commit wire and mail fraud in a series of "property flip" schemes:
Richard Howard, McKinney, Texas, attorney and principal in Progressive Title & Abstract - a real estate title company Robert Brooks controlled; George Autobee, straw buyer and former Bexar County sheriff's deputy; Cedric Lester and Casey Vaughan, appraisers;
Yvonne Salazar Quintanilla, formerly of San Antonio and now of Dallas, Texas, employee of Pro Processing, an entity Robert Brooks established and controlled that allegedly prepared bogus mortgage applications; Niesha Manuel, Dallas, Texas, employee of Pro Processing; Tamatha Buckholt, Dallas, Texas, employee of Pro Processing; Stacy Owens, Dallas, Texas, a branch manager and escrow officer at Equity Title of Texas;
Geraldine Williams, Dallas, Texas, employee at Progressive Title & Abstract; Cesar Gonzales, Dallas, Texas, employee at Progressive Title & Abstract; Joseph Cooper, San Antonion, Texas, real estate agent; Vadim Gazanchiyants, Las Vegas, Nevada, a property manager who worked on behalf of Robert Brooks;
Deborah Allen, Bulverde, Texas, who worked at various times for Adkins Financial Group and for Cheryl Brooks; Mauricio Betes, Inglewood, California, straw buyer; Stephen Brott, Los Angeles, California, straw buyer;
Rick Russell, Marina Del Rey, California, straw buyer; Anthony Lorek, Lancaster, California, straw buyer; Claude Vaughan, Dixon, California, straw buyer; Glynnwood Bowman, Valley Village, California, straw buyer; and Stanley Roos, Los Angeles, California, straw buyer.
The indictment alleges that the defendants, under the direction of Brooks, participated in a mortgage fraud scheme whereby he purchased properties at fair market value then resold at an artificially inflated price to straw purchasers. He recruited his co-defendants-appraisers, loan processors, title company employees, straw purchasers, etc.-and provided them with kickbacks from loan proceeds for their participation in the scheme.
He also used the proceeds from the purported sales to various nominees to pay for his initial purchase of real estate, to pay closing costs for both his purchase and sale to the nominee, to pay the nominee's down-payment, to pay the nominee for the nominee's participation, and to pay the mortgage for the first 12 months, after which each mortgage went into default.
The indictment charges that Brooks' mortgage loan scheme involved 40 properties primarily located in the Dallas area and defrauded financial institutions in Dallas, San Antonio and Houston of approximately $20 million. The indictment also seeks the criminal forfeiture of approximately $127,000 in U.S. Currency as well as a 2007 21' Liberator boat and trailer belonging to Brooks purchased with proceeds from the illegal scheme.
The indictment also seeks a monetary judgment against all of the defendants in the amount of $1 million.
A Court summons has been issued for these defendants. Conviction on this conspiracy charge is punishable by up to 30 years in federal prison
United States Attorney John E. Murphy; Ralph G. Diaz, Special Agent in Charge of the Federal Bureau of Investigation, San Antonio Division; and, William "Bill" Cotter, Acting Special Agent in Charge of the Internal Revenue Service-Criminal Investigation in San Antonio, announced that 29 people have been indicted in the Western District of Texas under "Operation Stolen Dreams"-a nationwide crackdown on mortgage fraud.
"FBI and its law enforcement partners will continue to pursue white collar criminals who pose a continued threat to our economy by undermining the mortgage industry. This ongoing crime problem is considered by the FBI to be a national security threat," stated Ralph G. Diaz, Special Agent in Charge of the Federal Bureau of Investigation, San Antonio Division.
These cases are being investigated by agents from the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. They are being prosecuted by Assistant United States Attorneys William R. Harris, James Blankinship and Tom McHugh.
Operation Stolen Dreams was organized by President Obama's interagency Financial Fraud Enforcement Task Force, which was established to lead an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. 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.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
We must be vigilant against fraud, recognizing its signs and taking proactive, definite, and realistic steps to not only prevent it but also punish it.
It starts with me.
It starts with you.
It starts with us…
You are all encouraged to report any suspected mortgage fraud activity to authorities. For more information, visit StopFraud.gov.
Michael S. Richardson
Author of "An American Epidemic, Mortgage Fraud a Serious Business"
Follow me on Twitter @ FocusonFraud
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