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NEWS RELEASE

OFFICE OF THE UNITED STATES ATTORNEY

WESTERN DISTRICT OF MISSOURI


JOHN F. WOOD



Contact Don Ledford, Public Affairs ● (816) 426-4220 ● 400 East Ninth Street, Room 5510 ● Kansas City, MO 64106

www.usdoj.gov/usao/mow/index.html



MAY 21, 2007

FOR IMMEDIATE RELEASE


TWO KC MEN PLEAD GUILTY TO

MORTGAGE FRAUD CONSPIRACY


            KANSAS CITY, Mo. – John F. Wood, United States Attorney for the Western District of Missouri, announced that two Kansas City, Mo., men pleaded guilty in federal court today to their roles in a conspiracy to commit mortgage fraud.


             James E. Coleman, 59, and James R. Rhoades, 48, both of Kansas City, pleaded guilty in separate appearances before U.S. District Judge Howard F. Sachs to the charges contained in a Jan. 4, 2007, federal indictment. Coleman is a Certified Public Accountant who formerly served as president of the board of a Kansas City magnet school.


             Coleman and Rhoades admitted that, from early September through Nov. 17, 2006, they participated in a conspiracy to defraud Fieldstone Mortgage Corporation. Coleman also pleaded guilty to four counts of wire fraud.


             On May 14, 2007, co-defendant Jeremy A. Plagman, 29, of Lee’s Summit, pleaded guilty to his role in the conspiracy. Plagman, an appraiser doing business as JET Appraisals in Lee’s Summit, provided an inflated appraisal of $1.2 million for property at 5034 Sunset Drive in Kansas City, Mo. Coleman’s role in the conspiracy was to prepare and provide a number of fraudulent letters for co-conspirators attesting to their credit worthiness. These letters and the inflated appraisal were submitted to Fieldstone Mortgage as part of the loan application to purchase the property. Rhoades’ role in the conspiracy was to assist a co-defendant in obtaining documents needed for the transaction, to prepare and submit false documents as needed, and to contact co-conspirators as needed.


             Co-conspirators hoped to obtain loan proceeds in excess of the property’s actual sale price by falsely representing to the mortgage lender that the stated sale price was greater than the actual sale price.


             Coleman also admitted that, on three separate occasions in October and November 2006, he committed wire fraud by transmitting facsimiles of fraudulent documents in furtherance of the conspiracy. Additionally, Coleman admitted to wire fraud by acknowledging his responsibility for a facsimile transmission of signed closing documents relating to the sale and purchase of the property that was sent to Fieldstone Mortgage.


            Under federal statutes, each of the co-defendants could be subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution, on the conspiracy charge. Coleman could also be subject to a sentence of up to 20 years in federal prison without parole, plus a fine up to $250,000, on each of the wire fraud charges. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.


            This case is being prosecuted by Assistant U.S. Attorney Linda Parker Marshall and Senior Litigation Counsel Gene Porter. It was investigated by the Federal Bureau of Investigation.


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This news release, as well as additional information about the office of the United States Attorney for the Western District of Missouri, is available on-line at

www.usdoj.gov/usao/mow/index.html