Annapolis Woman Indicted in Real Estate And Business Loan Fraud Scheme
Indictment Seeks Forfeiture of Over $4 Million
Baltimore, Maryland - A federal grand jury has indicted Winnie Joanne Barefoot, a/k/a Winnie Jo Budzina, a/k/a Winnie JoAnne Conn, a/k/a Joanne Knopsnyder, a/k/a Olivia JoAnne Morgan, a/k/a Olivia JoAnne Barefoot Morgan, age 55, of Annapolis, Maryland, for bank, wire and mail fraud; social security fraud; and making false statements to the Social Security Administration. The indictment was returned on July 30, 2010 and unsealed the next day upon Barefoot’s arrest. Barefoot has a detention hearing tomorrow, August 3, 2010 at 10:30 a.m.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation.
According to the seven count indictment, from December 2005 to August 2009, Barefoot used the identity of Olivia JoAnne Morgan and her daughter to engage in fraudulent real estate and loan transactions, including transactions involving three properties in Annapolis and a business entity she operated.
Specifically, the indictment alleges that Barefoot used a forged power of attorney from her daughter to purchase property at 3528 Narragansett Avenue, Annapolis. Her daughter had not provided any such power of attorney nor had any intention of acquiring the property. Barefoot is alleged to have falsely increased the amount of the deposit to the sellers by $100,000, thus changing the loan-to-value ratio of the transaction; and falsely stated the amount of her daughter’s income and assets. As a result, a mortgage company lent $616,250 for the purchase of the property.
The indictment further alleges that Barefoot used the identity of Olivia JoAnne Morgan and other false information to apply for a mortgage loan to purchase property at 896 Coachway, Annapolis.
In February 2007, Barefoot is alleged to have submitted a fraudulent loan application to a bank to increase an existing home equity credit line from $1.3 million to $2.1 million, secured by property at 1588 Eaton Way in Annapolis where she resided with CWH from 2002 to 2009. Barefoot is alleged to have falsely represented in the loan application that she and her “husband” CWH each had monthly income of $25,000; that her net worth was over $10 million; and used a false social security number.
Barefoot is alleged to have submitted fraudulent applications for a $250,000 line of credit loan and a $120,000 commercial loan to operate Maryland Hyperbarics, LLC, a hyperbaric clinic. On one application in February 2007, she is alleged to have falsely represented that her income and the combined assets for herself and CWH was over $12 million; that the value of the Eaton Way property was $4 million and that it was unencumbered; and used a false social security number. In the other application she falsely represented that her monthly income was $30,861, her personal net worth was approximately $1.2 million and that she had not filed bankruptcy in the past 10 years, although in fact she filed bankruptcy in 1999. Barefoot secured the $250,000 line of credit using a forged indemnity deed of trust on the Eaton Way property that was purportedly signed by CWH.
Finally, the indictment alleges that on June 3, 2003 Barefoot applied to the Social Security Administration (SSA) for SSI benefits, claiming that she was disabled beginning in 1997 due to back problems. The indictment alleges that she falsely: denied ever having been accused or convicted of a felony, when in fact she was arrested in 1980 and convicted of federal and state felony offenses; and represented that she had no resources nor received any type of income. Barefoot was ultimately approved for SSI disability benefits in April 2007, and received more than $26,000 in benefits to which she was not entitled. In December 2008, Barefoot falsely represented to SSA representatives investigating her eligibility for benefit payments that she lived alone and that “Olivia Joanne Morgan” was her sister, who was married to CWH, and that they were getting a divorce so CWH spent a lot of time at her house on 896 Coachway, Annapolis.
As a result of the fraud schemes, the indictment seeks forfeiture of $4,061,000.
Barefoot faces a maximum sentence of 30 years in prison and a $1 million fine on each of three counts of bank fraud; 20 years in prison and a $250,000 fine on each of two counts of wire fraud; and five years in prison and a $250,000 fine for social security fraud and making false statements.
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.
United States Attorney Rod J. Rosenstein thanked Assistant United States Attorney P. Michael Cunningham, who is prosecuting the case.