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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


SEPTEMBER 11, 2008

FOR IMMEDIATE RELEASE


REAL ESTATE INVESTOR SENTENCED FOR $5 MILLION MORTGAGE FRAUD CONSPIRACY


            KANSAS CITY, Mo. – John F. Wood, United States Attorney for the Western District of Missouri, announced today that a Lee’s Summit, Mo., man was sentenced in federal court today for his role in a $5 million mortgage fraud conspiracy.


            Eric Kendall Taylor, 37, of Lee’s Summit, was sentenced by U.S. District Judge Gary A. Fenner this morning to five years and three months in federal prison without parole. The court also ordered Taylor to pay $1,418,844 in restitution.


            On Aug. 25, 2006, Taylor pleaded guilty to conspiracy and to money laundering. Taylor was in the business of investing in residential properties in Kansas City and Lee’s Summit. He used the business name C and K Co. to create false second mortgages on properties and to obtain loan proceeds. He also used the fictitious business names Pinetree Consulting, T & M Management, T & M Enterprise, and W & W Enterprise, to create false employment and income information, documentation, and verification.


            Taylor admitted that he participated in a conspiracy to defraud mortgage lenders of more than $5 million and to transfer money taken by fraud across state lines. Eric Taylor acquired residential properties after foreclosure and at reduced prices, then recruited straw buyers to purchase that real estate and obtain mortgage loans for the properties, or purchased properties in his own name. He prepared false and fraudulent loan applications and supporting documentation for submission to mortgage lenders in the names of the straw borrowers, caused inflated appraisals to be prepared in relation to the properties, and submitted false and fraudulent loan applications, appraisals, documentation and other representations to mortgage lenders.


            In order to further the conspiracy, Taylor purchased a false Social Security number and false payroll stubs during the summer of 1999 to submit to mortgage lenders to document the false information he planned to submit on loan applications. In July 2000, he created false payroll stubs and false W-2 forms, falsely showing he was employed by a fictitious company at a fictitious salary. In 2001, Taylor arranged for and set up a business telephone line at the home of a relative to list on loan application as the telephone number of his employer. When a mortgage lender called the business telephone number, the relative confirmed the information or took a message and notified Taylor.


            Between the summer of 1999 and Sept. 23, 2005, mortgage lenders approved 23 fraudulent loans totaling $5,158,368.


            On Sept. 19, 2001, Taylor deeded the residential property at 2903 S.W. 13th Terr., Lee’s Summit, to his mother and co-defendant Doris J. Taylor, 61, of Kansas City, Mo. Doris Taylor was in business as a real estate broker under the name Doris J. Taylor Realty; she also invested in residential properties in Kansas City and Lee’s Summit. Eric Taylor had purchased the property previously and obtained a loan by fraud in connection with that purchase.


            Between Sept. 28 and Dec. 5, 2001, Doris Taylor applied for, and Eric Taylor caused to be applied for, a mortgage loan from National City Mortgage, also doing business as Commonwealth United Mortgage Co., for approximately $332,350 in connection with her purchase of the Lee’s Summit property. In the loan application and supporting documentation, Doris Taylor provided false information, including false income information, false asset information, false tax returns, the misrepresentation that she had owned the property since October 2000, and an inflated appraisal.


            National City Mortgage approved the loan in reliance on the misrepresentations contained in the loan application. On or about Dec. 17, 2001, National City Mortgage sent a $331,859.19 check, drawn on the firm’s account Citibank in Buffalo, New York, to Realty Title Co. in Independence. The check was deposited in the account of Realty Title Co. at Hillcrest Bank in Independence.


            Doris Taylor pleaded guilty to money laundering on Dec. 13, 2006, and awaits sentencing.


            This case is being prosecuted by Assistant U.S. Attorney Linda Parker Marshall. It was investigated by the Federal Bureau of Investigation and IRS-Criminal 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