SUPERSEDING INDICTMENT CHARGES TWO MORE ALLEGED PARTICIPANTS IN NEW HAVEN MORTGAGE FRAUD SCHEMES
David B. Fein, United States Attorney for the District of Connecticut, announced that two individuals were arrested today on federal charges related to their alleged participation in two separate mortgage fraud schemes involving the purchase of numerous residential properties in New Haven, Conn.
On February 24, 2012, a federal grand jury sitting in New Haven returned a five-count superseding indictment charging ROGER WOODSON, also known as “Kwame Nkrumah,” 55, of Meriden, CHARMAINE DAVIS, 53, of Waterbury, and JACQUES KELLY, 46, of Poughkeepsie, N.Y., with conspiracy and fraud offenses. The indictment was unsealed today following the arrests of WOODSON and DAVIS. KELLY was originally charged by indictment in October 2011.
The indictment alleges that, from approximately September 2006 to July 2008, WOODSON, KELLY, Ronald E. Hutchison, Jr. and others conspired to commit mail and wire fraud relating to purchases of numerous homes in New Haven. As part of the conspiracy and in connection with these purchases, WOODSON, KELLY, Hutchison and others received millions of dollars in residential real estate loans by submitting materially false loan applications, fictitious leases, and false down payments to mortgage lenders. The defendants disguised from mortgage lenders the true sales price of the houses through the use of two HUD-1 forms, only one of which was sent to the lender, and secret contract addenda. In addition, the buyers often received payments at closing, but those payments were not disclosed to the mortgage lender.
The indictment alleges, in part, that the co-conspirators entered into sales contracts with property sellers for prices that were higher than the actual prices the sellers received at closing. The co-conspirators then executed contract addenda that reflected the actual, lower prices. While the sales contracts bearing the contract price would be disclosed to mortgage lenders, the contract addenda were never disclosed.
The indictment further alleges that, from approximately September 2006 to July 2008, WOODSON and DAVIS, who acted as a mortgage broker, fraudulently obtained more than $1 million in real estate loans in connection with the purchase of additional New Haven properties. As part of the scheme, WOODSON, DAVIS and others submitted fraudulent loan applications, HUD-1 forms, employment verification forms and other documentation to mortgage lenders to obtain financing to purchase properties. Also, as the mortgage broker, DAVIS submitted loan applications to lenders that falsely stated the borrower’s intention to reside in the subject property, and that failed to disclose a complete listing of the borrowers assets and liabilities, including other residential mortgages that DAVIS brokered for the same borrower.
WOODSON and KELLY are charged with one count of conspiracy, one count of mail fraud and one count of wire fraud, and WOODSON and DAVIS are charged with one count of conspiracy and one count of mail fraud. Each of these charges carries a maximum term of imprisonment of 20 years.
The indictment also contains a forfeiture allegation that requires WOODSON and KELLY, if convicted of any count of the indictment, to forfeit property and/or a money judgment of at least $5 million, as proceeds of this alleged scheme. If convicted, DAVIS is subject to forfeiture of at least $800,000.
On January 10, 2012, Hutchison pleaded guilty to one count of conspiracy. He awaits sentencing.
U.S. Attorney Fein stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This case is being investigated by the Federal Bureau of Investigation, the United States Postal Inspection Service, and the U.S. Department of Housing and Urban Development – Office of Inspector General. The case is being prosecuted by Assistant United States Attorney David T. Huang and Special United States Attorney Jonathan N. Francis.
In July 2009, the U.S. Attorney’s Office and the Federal Bureau of Investigation announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force, or by sending an email to firstname.lastname@example.org.
The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service – Criminal Investigation; U.S. Postal Inspection Service; U.S. Department of Housing and Urban Development, Office of Inspector General; Federal Deposit Insurance Corporation, Office of Inspector General, and State of Connecticut Department of Banking.
This case was brought in coordination with the President’s Financial Fraud Enforcement Task Force, which was established to wage an aggressive and coordinated effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. 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.
To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.
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