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Remarks of U.S. Attorney Bradley J. Schlozman

JANUARY 3, 2007

GOOD AFTERNOON. I’M HERE TODAY TO ANNOUNCE THE INDICTMENT OF THREE INDIVIDUALS, INCLUDING KANSAS CITY COUNCILWOMAN SAUNDRA McFADDEN-WEAVER, ON SEVEN COUNTS OF CONSPIRACY AND WIRE FRAUD FOR THEIR ROLE IN A SCHEME TO ENGAGE IN MORTGAGE FRAUD. IN ADDITION TO MS. McFADDEN-WEAVER, THE OTHER INDIVIDUALS INDICTED TODAY ARE EMANUEL KIND AND RICKY HAMILTON.

AS DETAILED IN THE INDICTMENT, THE DEFENDANTS CONSPIRED, FROM APPROXIMATELY AUGUST 2005 THROUGH AUGUST 2006, TO SECURE A MORTGAGE FOR MS. McFADDEN-WEAVER BY MEANS OF MATERIAL MISREPRESENTATIONS AND OTHER FALSE AND FRAUDULENT PRETENSES. IN SO DOING, THE DEFENDANTS EMPLOYED VARIOUS FORMS OF COMMUNICATION THAT ALSO IMPLICATE THEM ON CHARGES OF WIRE FRAUD.

THE GIST OF THE CONSPIRACY IS THAT McFADDEN-WEAVER WANTED TO RENOVATE A HOME HER CHURCH OWNED ON BENTON BLVD. SO AS TO PUT IT IN A LIVABLE CONDITION. WHEN SHE WAS UNABLE TO SECURE FINANCING FOR THE RENOVATIONS, SHE APPROACHED AN ACQUAINTANCE, EMANUEL KIND, AND PROPOSED A COMPLEX — AND ILLEGAL — DEAL INVOLVING THE PURCHASE OF ANOTHER HOME THAT WOULD PROVIDE HER AN INFUSION OF CASH.

SPECIFICALLY, McFADDEN-WEAVER AND KIND AGREED THAT McFADDEN-WEAVER WOULD PURCHASE A RESIDENCE ON SOUTHEAST HACKAMORE IN LEE’S SUMMIT, FOR MR. KIND. THE ARRANGEMENT CALLED FOR MS. McFADDEN-WEAVER TO OBTAIN A LOAN OF $400,000, AROUND $35,000 MORE THAN THE SALES PRICE OF THE HOME. THE PLAN WAS FOR MS. McFADDEN-WEAVER TO THEN USE THE EXCESS FUNDS FROM THE PURCHASE OF THE LEE’S SUMMIT HOUSE TO RENOVATE HER BENTON BOULEVARD RESIDENCE. MR. KIND, MEANWHILE, WOULD LIVE IN THE LEE’S SUMMIT HOME AND BE RESPONSIBLE FOR THE MORTGAGE. CRITICALLY, MS. McFADDEN-WEAVER HAD NO INTENTION OF EVER LIVING IN THE LEE’S SUMMIT HOUSE, NOR DID SHE INTEND TO HAVE ANY FINANCIAL RESPONSIBILITY FOR THE PROPERTY.

NONE OF THIS, OF COURSE, WAS AT ALL KOSHER. FIRST OF ALL, IN ORDER TO QUALIFY FOR THE LOANS AND THEIR FAVORABLE INTEREST RATES, MS. McFADDEN-WEAVER SIGNED — UNDER PENALTY OF PERJURY — OWNER/OCCUPANCY FORMS. IN OTHER WORDS, SHE FALSELY REPRESENTED THAT SHE WOULD BE OCCUPYING THE LEE’S SUMMIT PROPERTY AS HER PRIMARY RESIDENCE. IN ADDITION, SHE FRAUDULENTLY INFLATED HER TRUE INCOME ON THE LOAN APPLICATION. AND THEN SHE LIED ABOUT THE SOURCE OF THE FUNDS FOR THE DOWN PAYMENT.

HAD THE LENDER KNOWN THE FULL TRUTH ABOUT McFADDEN-WEAVER’S FINANCES OR RESIDENCY INTENTIONS, SHE WOULD HAVE EITHER NEVER RECEIVED THE LOAN IN THE FIRST PLACE OR SHE WOULD HAVE HAD TO PAY A MUCH HIGHER INTEREST RATE.

AS ALLEGED IN THE INDICTMENT, PART OF THE REASON THAT THE LENDER WAS IN THE DARK WAS THAT DEFENDANT RICKY HAMILTON, WHO ACTED AS THE MORTGAGE BROKER FOR MS. McFADDEN-WEAVER AND WHO WAS FULLY AWARE OF THE DETAILS OF THE ILLICIT ARRANGEMENT BETWEEN McFADDEN-WEAVER AND KIND, NEVER DIVULGED WHAT HE KNEW TO THE LENDER. IN FACT, HAMILTON KNOWINGLY TRANSMITTED McFADDEN-WEAVER’S FRAUDULENT LOAN APPLICATION TO THE LENDER TO ENSURE ITS EFFECTUATION.

THE SAGA THEN JUMPS FORWARD TO THE SUMMER OF 2006. IN JUNE, McFADDEN-WEAVER AND KIND BOTH INDEPENDENTLY SOUGHT TO REFINANCE THE LEE’S SUMMIT PROPERTY IN ORDER TO AVOID FORECLOSURE. AT THIS POINT, THERE HAD BEEN NO MORTGAGE PAYMENTS MADE IN MORE THAN 5 MONTHS AND, ACCORDING TO SOME WITNESSES, NO PAYMENTS EVER MADE ON THE PROPERTY. McFADDEN-WEAVER CERTAINLY HAD NEVER MADE ANY PAYMENTS.

YET McFADDEN-WEAVER CONTINUED TO FALSELY REPRESENT THAT SHE WAS THE PRIMARY OCCUPANT OF THE HOME EVEN THOUGH SHE HAD NOT A SPENT A DAY OF HER LIFE THERE. SHE FURTHER CLAIMED THAT SHE COULD COME UP WITH THE CASH TO GET ALL THE PAYMENTS CAUGHT UP, EVEN THOUGH THERE WAS NO TRUTH TO THAT. MEANWHILE, AT SOME POINT AFTER THE CLOSING ON THE LEE’S SUMMIT PROPERTY, McFADDEN-WEAVER AND KIND HAD EXECUTED A CONTRACT FOR DEED FOR THE RESIDENCE. BUT THE TWO FALSELY BACK-DATED THE DOCUMENT, CLAIMING THAT IT WAS SIGNED THE DAY AFTER THE CLOSING. IN THE END, THE REFINANCING WAS DENIED, THE HOUSE OF CARDS COLLAPSED, THE BANK FORECLOSED ON THE PROPERTY, AND THE FBI CLOSED IN. AND NOW HERE WE ARE.

THE MESSAGE TODAY IS THAT THESE FINANCIAL CRIMES DO NOT PAY. THE INDIVIDUALS WHO COMMIT THEM ARE MOTIVATED BY GREED AND AVARICE. BUT THE PROSECUTORS IN THIS OFFICE AND THE FEDERAL INVESTIGATORY AGENTS WHO WORK WITH US WILL STAND AS A BULWARK AGAINST THESE CRIMINALS.
FOR THOSE CONTEMPLATING ENGAGING IN SIMILAR CONDUCT, LET ME TELL YOU NOW THAT WE WILL CATCH YOU AND YOU WILL BE PUNISHED SEVERELY. TARGETING MORTGAGE FRAUD HAS BEEN A TOP PRIORITY FOR THIS OFFICE. YOU’VE SEEN SOME MAJOR PROSECUTIONS ALREADY IN THIS DISTRICT, AND YOU WILL SEE PLENTY MORE. WE ARE ATTACKING THIS CRIMINAL ACTIVITY WITH THE SAME FEROCITY THAT WE PURSUE DRUG DEALERS AND OTHER VIOLENT CRIMINALS. THIS CASE IS BUT THE LATEST EXAMPLE.

LET ME MAKE TWO FINAL COMMENTS. FIRST, OF COURSE, IS THE STANDARD CAVEAT THAT ALL DEFENDANTS ARE PRESUMED INNOCENT UNTIL PROVEN OTHERWISE. SECOND, I WANT TO UNDERSCORE THAT ALTHOUGH MORTGAGE FRAUD MAY BE COMMITTED BY A WIDE ARRAY OF INDIVIDUALS ACROSS THE SOCIOECONOMIC SPECTRUM, WE ARE, AND WILL CONTINUE TO, LOOK PARTICULARLY CLOSELY AT MORTGAGE FRAUD BY PUBLIC OFFICIALS. LET THE WORD GO OUT.

WITH THAT, I AM HAPPY TO ANSWER ANY QUESTIONS.