FOR FURTHER INFORMATION CONTACT
AUSA VICKIE E. LEDUC or
MARCIA MURPHY at 410-209-4885
September 14, 2009
FOR IMMEDIATE RELEASE
LAWYER AND CONSPIRATOR SENTENCED IN METROPOLITAN MONEY STORE MORTGAGE FRAUD SCHEME
10 Defendants Conspired to Take Title of Homes from Financially Distressed Homeowners
and Secretly Use Home Equity for Personal Benefit
Greenbelt, Maryland - U.S. District Judge Roger W. Titus sentenced Richard Allison, age 38, of Camp Springs, Maryland, an attorney and employee of the U.S. Census Bureau, today to 18 months in prison followed by five years of supervised release for conspiracy to commit mail and wire fraud, in connection with a mortgage fraud scheme which falsely promised to help homeowners facing foreclosure keep their homes and repair their damaged credit, announced United States Attorney for the District of Maryland Rod J. Rosenstein. Judge Titus also sentenced co-conspirator Carlisha Dixon, age 32, of Hyattsville, Maryland today to five months in prison and five months home detention, followed by five years of supervised release for the conspiracy. Judge Titus also entered an order of restitution against Dixon of $180,000 and deferred restitution for Allison pending a hearing on October 7th to determine the amount and allocation of restitution among the victims.
According to Allison’s plea agreement, Allison became employed by the Metropolitan Money Store located in Lanham, Maryland in December 2005. He provided legal services to: the Metropolitan Money Store, which offered foreclosure consultation and credit services to financially distressed homeowners; the Fordham & Fordham Investment Group, Ltd., a foreclosure consulting and credit servicing business based in Lanham and Greenbelt, Maryland; Burroughs & Smythe Financial Services, Inc., another foreclosure consulting and credit servicing business based in Lanham, Maryland; and several individual officers of the companies.
Beginning in March 2006, Allison conspired with company officers in a scheme to fraudulently promise to help homeowners, who had substantial equity in their homes but were facing foreclosure because of their inability to make monthly mortgage payments, avoid foreclosure and repair their damaged credit. The homeowners were directed to allow title to their homes to be put in the names of third party purchasers (the straw buyers) for a year, during which time Metropolitan Money Store promised to improve the homeowners’ credit ratings, help them obtain more favorable mortgages, and eventually return title to their homes to them. The homeowners were told that the equity withdrawn from the properties would be used to pay the mortgage and expenses on their homes and to repair their credit. The straw buyers were paid $10,000 to participate in the scheme.
Using the homeowners’ properties, the conspirators applied for mortgages to extract the maximum available equity from the homes. They prepared and submitted fraudulent loan applications to mortgage lenders to obtain fraudulently inflated loans on the target properties in the straw buyers’ names. At settlements, the conspirators imposed numerous fees and required “seller contributions” which were far in excess of industry standards; they imposed fees for services which were not performed, disclosed or explained to the homeowners; and they transferred the sale proceeds out of the escrow accounts into the conspirators’ business and personal bank accounts and converted a substantial portion of those funds to their personal use.
Allison agreed to act as a straw buyer and secure mortgage loans in his own name for two homeowners whose properties were located in Fredericksburg, Virginia and Washington, D.C., and in return, was paid $10,000 for each property. Allison made false statements as to personal and financial information on a mortgage loan application and settlement documents.
According to Dixon’s plea agreement, beginning in November 2005, Dixon agreed to participate in the conspiracy by serving as a straw buyer for two properties in Maryland: 1885 Iverson St., Temple Hills; and 2401Kent Village Place, Hyattsville. In return, Dixon was paid $10,700. Her co-conspirators also paid Dixon’s mortgage on her personal residence several times, which was approximately $2,200 per month, Dixon’s airfare and hotel expenses for a trip to Miami, a rental car and a refrigerator.
Dixon further participated in the scheme when in May 2006, she was hired to run Burroughs & Smythe, which assisted the Metropolitan Money Store in offering foreclosure consultation and credit services to financially distressed homeowners, even though Dixon had no prior background in credit repair or financial services. Dixon was paid $1,300 every two weeks. During the course of her employment from May 2006 to March 2007, Dixon, along with co-conspirators Clifford McCall and Jennifer McCall, deposited at least $1,553,152.19 into the company’s bank accounts, some of which was used to pay personal expenses of Dixon’s co-conspirators. Dixon fraudulently signed multiple verifications of rent or employment listed in the names of straw buyers, and falsely confirmed a straw buyer’s rent or employment when a lender would call to verify the information. Dixon also obtained cashier’s checks drawn on Burroughs & Smythe bank accounts in the names of straw buyers and Metropolitan Money Store employees to facilitate the conspiracy and scheme to defraud.
Ten defendants, including a lawyer, mortgage broker, real estate agent, loan processor, company officers and family members have pleaded guilty in this scheme. Kurt Fordham, age 39, of Fort Washington, Maryland was sentenced on July 10, 2009 to 10 years in prison for his participation in the scheme. Fordham was personally responsible for over $13.5 million of losses to mortgage lenders and used over $800,000 of fraudulently obtained proceeds to pay for his wedding. The remaining defendants are scheduled to be sentenced within the next three months.
United States Attorney Rod J. Rosenstein thanked the Federal Bureau of Investigation, U.S. Secret Service, Internal Revenue Service - Criminal Investigation and the Maryland Department of Labor, Licensing and Regulation’s Division of Financial Regulation Investigative Unit for their investigative work. Mr. Rosenstein commended Assistant United States Attorneys James A. Crowell IV and Christen A. Sproule, who are prosecuting the case.