Press Releases
FORMER PRESIDENT OF CITYWIDE MORTGAGE MICHAEL O’KEEFE, JR. SENTENCED FOR ROLE
IN HOUSE FLIPPING SCAM
October 14, 2009
FOR IMMEDIATE RELEASE
MICHAEL O’KEEFE JR., age 50, a resident of New Orleans, Louisiana, was sentenced today in federal court by U. S. District Judge Ivan L.R. Lemelle to 18 months incarceration pursuant to his plea of guilty to Making False Statements in a HUD Transaction, announced U. S. Attorney Jim Letten. In addition, Judge LeMelle also ordered O’KEEFE be placed on one (1) year of supervised release during which time he will be under federal supervision and risk additional imprisonment should he violate any terms of the supervision.
The defendant was also ordered to pay $486,585.55 in restitution to the Department of Housing and Urban Development. The defendant made payments totaling $200,000.00 prior to sentencing.
The bills of information and documents filed at the time of his plea of guilty and the guilty pleas of his co-conspirators CALVIN DAVIS and MICHELLE CARVER describe a “housing flipping” scheme at Citywide Mortgage Company. DAVIS purchased properties in the 9th Ward and Lower 9th Ward, obtained fraudulent appraisals and arranged for straw buyers to purchase them. DAVIS then sent the strawbuyers to Citywide Mortgage to obtain loans by using fraudulent employment and credit documents as well as false tax returns. These loans were approved by MICHELLE COCHRANE, a former underwriter at Citywide Mortgage knowing that the loans were fraudulent. After she approved the fraudulent loan applications, the loans were forwarded to the HUD offices in Denver Colorado. Based on the fraudulent applications, HUD insured the loans. The federally insured loans were then sold to investors on the secondary market. Various properties eventually went into default and HUD became responsible for paying off those loans.
O’KEEFE was the president of Citywide Mortgage Company during the pendency of the scheme and previously pled guilty admitting that he assisted the scheme by paying commissions to COCHRANE for originating HUD/FHA loans and hiding that fact from HUD during the insurance application process. This was accomplished by either listing the defendant as the loan originator or listing a ghost employee “B.C.,” as the loan originator. A check was issued to “B.C.”, endorsed by CARVER and deposited in her bank account. The checks were issued by Citywide Mortgage and signed by O’KEEFE. The false identity of the loan originator were included in the file submission to HUD.
O’KEEFE was the seventh person to be sentenced for offenses stemming from this investigation. MICHELLE COCHRANE was sentenced to one year and one day pursuant to her plea of guilty to Conspiracy to Make False Statements to Obtain HUD Insurance. CALVIN DAVIS was sentenced to 40 months pursuant to his pleas of guilty to Conspiracy to Commit Mail Fraud, Making False Statements in an Income Tax Return and Making False Statements in a HUD Transaction. ROBERT GREEN, who pled guilty to Making False Statements in HUD transaction and admitted that he prepared the fraudulent tax returns, was sentenced to a probationary term. Three “straw buyers” TIMOTHY FALLS, DENNIS ADDISON and DENNIS LEBLANC who also pled guilty to Making False Statements in HUD Transaction were also sentenced to probationary terms.
The case was investigated by the Department of Housing and Urban Development, Office of Inspector General; the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation Division and the United States Postal Inspection Service. The case was prosecuted by the Chief of the Organized Crime Strike Force Unit, Mark A. Miller and Assistant United States Attorneys Michael M. Simpson and Kevin G. Boitmann.
