Three Individuals Indicted in Mortgage Fraud Scheme Involving Properties in the Reservoir Hill Neighborhood of Baltimore
Alleged Loss of More Than $1 Million
Baltimore, Maryland - A federal grand jury has indicted Kimberly Eileen McMillian, a/k/a Kimberly Simmons and Kimberly Simmons McMillian, age 45, of Baltimore; Olutoyin Oladosu, a/k/a Tony Oladosu, age 53, of Lanham, Maryland; and Glenroy Emanuel Day, Sr., age 73, of Baltimore, on charges of conspiracy to commit and committing wire fraud affecting a financial institution, in connection with a million dollar mortgage fraud scheme. The indictment was returned on December 19, 2012, and unsealed today upon the arrest of McMillian.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; and Special Agent in Charge Robert Jasinski of the United States Secret Service â€“ Baltimore Field Office.
According to the nine count indictment, from September 1 to December 31, 2007, McMillian and Oladosu, assisted by Day, carried out a scheme to fraudulently obtain inflated home mortgages and then diverted a substantial portion of the proceeds resulting from the sale of four homes to themselves. Specifically, McMillian, who identified herself as a real estate agent, consultant and investor and as a mortgage loan broker, arranged to purchase three homes in the Reservoir Hill neighborhood of Baltimore in the names of others, after she told the owner of the company that owned the homes that she had a clients from New York City who were eager to buy residential properties in Baltimore.
McMillian then contacted a loan officer and advised him that she was working as a mortgage loan broker and wanted to submit several loan application packages to his bank for financing, because her own company would not be able to get the loans approved in time to meet the currently scheduled closing dates for the four Baltimore properties. The loan officer agreed to review the packages, each of which consisted of a loan application identifying the purchaser of the house and detailing their employment history, earnings, assets, and debts, along with supporting documentation such as pay stubs or vouchers and bank account statements.
According to the indictment, virtually all of the information submitted by McMillian in connection with the loan applications was false. The names and other personal information of the purported borrowers consisted of either stolen or fictitious identities, or were of persons who never intended to live in the houses or make the mortgage payments. The telephone numbers of the purported employers actually belonged to co-conspirators or others who had agreed to falsely verify the borrowersâ€™ employment. McMillian also arranged for Day to prepare misleading and fraudulent real estate appraisal reports on the three Reservoir Hill properties and a fourth property owned by McMillian herself, which McMillian then submitted to the bank in support of the loan applications. Based on the information provided in the loan applications, the false employment verifications, and fraudulent appraisals, the bank agreed to extend financing on each of the four properties, totaling $1.094 million.
At each of the four settlements, McMillian directed the settlement agent to transfer a substantial portion of the loan proceeds to her or to businesses associated with Oladosu, either pursuant to an assignment contract or to pay for purported renovations to the property. In fact, no repairs or renovations were carried out on any of the properties. The mortgage on each property soon went into default with mortgage payments either not made at all, or only one or two payments being made
The defendants each face a maximum sentence of 30 years in prison for the conspiracy and for each of eight counts of wire fraud affecting a financial institution. McMillian and Day had their initial appearance today and were released under the supervision of U.S. Pretrial Services. Oladosu is a fugitive.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets. Information about mortgage fraud prosecutions is available www.justice.gov/usao/md/Mortgage-Fraud/index.html.
Todayâ€™s announcement is part of efforts underway by President Obamaâ€™s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneysâ€™ offices and state and local partners, itâ€™s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein praised the FBI and U.S. Secret Service for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Jefferson M. Gray, who is prosecuting the case.