A $400,000 mortgage fraud ring involving a former Kansas City, Mo., city councilwoman, a mortgage broker and construction contractor has ended in a two-year prison term for one defendant, with the other two awaiting sentencing.
Emanuel M. Kind, 52, was sentenced Wednesday by U.S. Chief District Judge Fernando J. Gaitan Jr. to two years in federal prison without parole and ordered to pay $144,234 in restitution, prosecutors said.
Kind, a construction contractor, and co-defendant Ricky L. Hamilton, a former mortgage broker, entered guilty pleas on Aug. 9 for their part in a mortgage fraud scheme in which former City Councilwoman Saundra A. McFadden-Weaver allegedly acted as a straw buyer.
McFadden-Weaver, 48, of Kansas City, was convicted at trial on Aug. 16 for her role in the conspiracy as well as six individual counts of wire fraud.
An unrelated mortgage fraud case involving another prominent Kansas City-area politician, Katheryn J. Shields, has produced seven guilty pleas. Shields and her husband were among 11 people indicted Jan. 4 for their alleged role in the case, which involved the sale of their house (see Inman News story).
Shields, who held the elected position of Jackson County executive for 12 years, and her husband, Phillip F. Cardarella, denied the charges, and the couple was acquitted by a jury Nov. 7.
In the case involving McFadden-Weaver, prosecutors said the three co-defendants prepared false and misleading loan applications and supporting documents to obtain $400,000 in loans to purchase a home in Lee's Summit, Mo.
Prosecutors said McFadden-Weaver signed documents stating that she would repay the loans and that she would live in the residence, when it was Kind who would to live in the house and pay the mortgage and other expenses.
The loan documents overstated McFadden-Weaver's income and understated her liabilities, misrepresented that she intended to live in the residence, and misrepresented that she had inspected the property, prosecutors said.
Hamilton, a mortgage broker at Trinity Mortgage in Grandview, agreed to broker the loan for the purchase of the Lee's Summit residence, knowing that McFadden-Weaver did not intend to live in the residence and would have no responsibility for the property. Funds from the loans, which exceeded the value of the home, were to be used to rehab another property in Kansas City which McFadden-Weaver hoped to purchase from her church, prosecutors said.
Kind had agreed to make the improvements to the Kansas City property in exchange for McFadden-Weaver taking out the loans for the Lee's Summit property, prosecutors said.
MILA, a mortgage lending company in Mountlake Terrace, Wash., approved two loans totaling $400,000. The loans were later sold to other lenders and the property, at 301 S.E. Hackamore, was foreclosed in August 2006.
McFadden-Weaver, Kind and Hamilton were indicted by a federal grand jury Jan. 3 (see Inman News story).
Kind and Hamilton pleaded guilty to conspiracy to commit wire fraud and to one count of wire fraud, and McFadden-Weaver was convicted after a jury trial in U.S. District Court in Kansas City. The jury deliberated about seven hours over a two-day period before returning the guilty verdicts, prosecutors said.
A sentencing hearing for McFadden-Weaver has been continued to Dec. 28.
In the case involving the sale of Shields and Cardarella's home, Raymond Walter Zwego Jr., 59, of Kansas City, Mo., pleaded guilty Oct. 19 to leading a conspiracy to commit mortgage fraud.
Zwego, who prosecutors characterized as the organizer and leader of the scheme, admitted that he and his co-conspirators falsely represented to Fieldstone Mortgage that Shields and Cardarella's home sold for $1.2 million, when the actual sale price was $707,000.
Zwego was the seventh defendant to plead guilty to participating in the alleged scheme, in which prosecutors said an inflated appraisal of Shields and Cardarella's home was to be used in an attempt to obtain fraudulent loans.
Real estate broker Michael Rodd, 53, of Olathe, Kan., pleaded guilty on June 27 to playing a role in the mortgage fraud conspiracy. Alleged straw buyers Larry E. Barshaw, 57, and Linda M. Thompson-Barshaw, 58, both of Kansas City, pleaded guilty on May 25 to participating in the conspiracy and to wire fraud. James E. Coleman, 59, and James R. Rhoades, 48, both of Kansas City, pleaded guilty on May 21 to participating in the scheme. Appraiser Jeremy A. Plagman, 29, of Lee's Summit pleaded guilty May 14 to providing an inflated appraisal.
Prosecutors said each of the co-defendants could be subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution, on conspiracy charges. Zwego, the Barshaws and Coleman could also be subject to a sentence of up to 20 years in federal prison without parole, plus a fine up to $250,000 and an order of restitution, on each of the wire fraud charges. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
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source: lendinguniverse.com
