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FOR IMMEDIATE RELEASE |
March 10, 2008
APPRAISER PLEADS GUILTY TO CONSPIRACY IN LOAN FRAUD SCHEME
KANSAS CITY, KAN. – Lydell A. Flowers, 32, Overland Park, Kan., pleaded guilty Monday to one count of conspiracy to commit money laundering in a loan fraud scheme.
In his plea, Flowers admitted that during 2002, 2003 and 2004 he was part of a criminal conspiracy while he was employed as an apprentice real estate appraiser for various business entities in the Kansas City, Kan., metropolitan area.
“Mr. Flowers admitted that the actual loss attributable to the crimes in which he was involved was more than $2.5 million,” said U.S. Attorney Eric Melgren.
The conspirators targeted low income borrowers by enticing them to apply for real estate loans regardless of their credit rating or financial situation. Conspirators submitted fraudulently inflated real estate appraisals and false financial information to various lenders. At or near the time of closing, the conspirators would impose excessive and unexpected loan origination fees, appraisal fees and higher interest rates on borrowers.
On Sept. 23, 2003, Flowers prepared and submitted an appraisal on a property in the 7000 block of Kensington, Kansas City, Mo., knowing the value was inflated and the signature of a supervisory appraiser was forged. As a result, Hamilton Mortgage in Chicago transmitted by wire $63,405 in loan proceeds.
Flowers faces a maximum penalty of 20 years in federal prison and a fine up to $500,000. Sentencing is set for June 9.
The Internal Revenue Service– Criminal Investigation, the Johnson County Sheriff’s Department, the Overland Park Police Department, and the U.S. Secret Service’s Financial Crimes Task Force worked on the case. Assistant U.S. Attorney Marietta Parker is prosecuting.
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