Four Plead Guilty in Overland Park Mortgage Fraud
KANSAS CITY, KAN. – Four Kansas men have pleaded guilty to federal charges of conspiring to fraudulently obtain millions of dollar in mortgage loans, U.S. Attorney Barry Grissom said today.
Pleading guilty to conspiracy charges were:
Paul Hartfield, 55, Overland Park, Kan., who owned two Overland Park companies: Hart Investments and Diamond Mortgage.
Brian D. Jaimes, 42, Overland Park, Kan., who was president of Diamond Mortgage from 2003 to 2006.
John T. Bradfield, 53, Overland Park, Kan., who was president of Diamond Mortgage in 2006 and 2007.
Kevin M. Mahoney, 42, Stilwell, Kan., who was a loan officer for Diamond Mortgage
According to court documents, Hartfield, was in the business of buying depressed properties to rehabilitate and sell at a profit. He obtained loans totaling $4.9 million to rehabilitate more than 40 homes in the Kansas City metro area. He bought properties by obtaining loans based on “subject to” appraisals by which he could receive loans for up to 80 percent of what the home would be appraised for after renovations were complete.
Starting in October 2006, Hartfield stopped rehabilitating houses and began making false representations to lenders. He manufactured fraudulent contractor invoices and used checks that were never cashed to fraudulently obtain loans. In order to reduce his company’s debts, Hartfield began recruiting friends and family to purchase some of the properties he claimed to have rehabilitated. In most cases, the borrowers would not have qualified for loans to purchase the properties. The conspirators falsified loan applications and other supporting documents, inflating the borrowers’ income and assets to secure approval for loans. In some cases, Hartfield provided down payments at closing on the borrowers’ behalf and falsified information on loan applications to make it appear buyers had made the down payments.
Loans were fraudulently obtained for properties in Kansas City, Kan., Overland Park, Kan., Leawood, Kan, Kansas City, Mo., and Lake Lotawana, Mo.
Hartfield, who pleaded guilty to one count of conspiracy to commit bank fraud and money laundering, is set for sentencing Oct. 17. He faces a maximum penalty of 30 years in federal prison and a fine up to $250,000.
Jaimes, who pleaded guilty Monday to one count of conspiracy to commit wire fraud and money laundering, is set for sentencing Oct. 24. He faces a maximum penalty of 30 years and restitution of more than $1 million.
Bradfield, who pleaded guilty to one count of conspiracy to commit bank fraud, is set for sentencing Oct. 17. He faces a maximum penalty of 30 years and a fine up to $250,000.
Mahoney, who pleaded guilty to one count of conspiracy to commit wire fraud, is set for sentencing Oct. 24. He faces a maximum penalty of 30 years and a fine up to $250,000.
Grissom commended the Internal Revenue Service, the FBI, the Federal Deposit Insurance Corporation, Assistant U.S. Attorney David Smith and Assistant U.S. Attorney Jabari Wamble for their work on the case.