City In Flames
Atlanta fraud network responsible for more than $100 million in losses
mortgagedaily.com
November 12, 2002
By SAM GARCIA
A massive mortgage fraud ring in Atlanta responsible for more than a hundred million dollars in losses on hundreds of properties has been broken up by federal authorities.
Among the early players was Glenn Melvin Allen, who was employed as a loan officer and branch manager at Bankers Financial Group, Inc. of Greenbelt, Maryland, a mortgage brokerage. Allen brokered HUD insured mortgages for unqualified borrowers, according to the U.S. Attorney's office. Allen is accused of arranging for the financing of fraudulent loans by using false documentation and bribing others to do the same. Among the coconspirators on Allen's payroll were borrowers, recruiters of unqualified borrowers and a tax preparer,
Lenders allegedly defrauded by Allen include his employer, Bankers Financial Group, Inc., Countrywide Home Loans, 1st Jefferson Mortgage Corp., Premier Lending Co., Banc-financial Services Corp. and Title West Mortgage, Inc. In the Criminal Indictment against Allen, the government cited 31 properties where Allen used fraud to obtain more than $4 million in HUD financing.
A $227,920 mortgage on Allen's primary residence was among the 31 properties. Allen allegedly used his son's social security number as his own in that transaction.
Ann Fuhlmer, who has been working with local groups to fight mortgage fraud in Georgia, said that these loosely affiliated network of flippers caused her neighborhood to deteriorate, bringing criminal elements near her own suburban dwelling. She said some of the same properties were re-flipped within the same network. Fuhlmer, who now works as the assistant District Attorney with DeKalb County, said there were dozens of groups consisting of 4-5 participants, and 35 people are now in jail.
Fuhlmer said that flips, which were involved in these fraudulent deals, are transactions where a property is sold multiple times in a short period (same day to two weeks). The fair market value is inflated by using fraudulent appraisals.
Another player in the ring was Nafeesha Muminah Mohammed, a loan processor in the Stone Mountain, Georgia area. According to a Criminal Information document provided by the Departement of Justice, Mohammed, who also was known by the name Odessa Davis, was employed by Integrity South. The government has accused her of using fake documents, and directing her employees to do the same, to obtain mortgage loan approvals.
Mohammed is accused of using a counterfeit verification of deposit from a nonexistent California bank to obtain loan approval for the purchase of her own residence. She also allegedly forged the landlord's signature on a fake verification of rent and created dummy cashier's checks to conceal a poor rental payment history from the lender, Creve Coeur Mortgage Company. In addition, she created fake W-2's and paystubs from a fictitious employer, according to the complaint.
Excluding her personal residence, the complaint listed nine properties with financing totaling more than $1.5 million where Mohammed used fraudulent loan files to obtain loan approval.
One loan processor, Miriam Elizabeth Rebeka Heflin, allegedly submitted $2.3 million in fraudulent loans to lenders including Creve Coeur, Temple Inland, Assoc. Financial Svcs and DMR Financial Svc via Residential Mortgage. According to the Criminal Information filed against her, Heflin processed loans through Integrity South, New Atlantic Mortgage and Georgia Home Funding.
A mortgage broker, Claude Andrew Blevins, Jr., and Renee Antoinette Meeks were accused in Criminal Information filings of creating and submitting nearly $15 million in fraud loans and flipping properties in Lithonia and Stone Mountain. Lenders the two allegedly defrauded include Chase, Countrywide, Southstar, Crossland, RBMG, Mtg Portfolio, Loan City, Wells Fargo and GN Mtg Corp. Blevins ran the bogus packages through his company, American Mortgage Exchange.
Kay D. Williams Polote is accused by the government of paying off other mortgage brokers, straw borrowers and bank employees to effect mortgage fraud, according to a copy of the Criminal Information filed against her. Polote, who was an owner of Gold Coast Mortgage Group and Northeast Mortgage, allegedly used shell companies she owned to give lenders the appearance of legitimate settlement payoffs while fraudulently obtaining more than $1.5 million in proceeds from the closings.
Among the lenders Polote is accused of defrauding are:
American National Mortgage First TN Bank New South Federal
Amresco Home Loan Corp. Old Kent Mortgage
Bank One Home Mortgage Peoples Choice
Chadwick Mortgage Household Pinnacle Direct Funding
Chapel Funding IndyMac Bank Premier Lending
CitiFinancial Mortgage Long Beach Mortgage Saxon Mortgage
Equifirst Meritage Mortgage Union Planters Bank
Finance America Mortgage Portfolio Services
Polote allegedly paid homeless people to act as straw borrowers, including one that used a fake ID to secure a loan on a 2001 Mercedes CLK 320 Convertible for Polote.
In all, Polote secured approvals on about $18.5 million in mortgages, according to the Criminal Information, earning an estimated $623,500 in mortgage broker fees -- $31,800 from a single loan.
Fuhlmer, the DeKalb County Assistant District Attorney said, "Georgia ranks 4th in a recent nationwide survey of reported mortgage fraud cases, lagging only behind Florida, California and Maryland. Metro Atlanta's losses due to mortgage fraud exceed $100 million, but there is no slowdown in sight and losses are expected to rise."
Fuhlmer noted that mortgage fraud is a national phenomenon and its "true scope is unknown because there are no systems in place to fully measure its occurrence and it is under-reported because of financial penalties imposed on lenders/investors who discover it in their portfolios." |
