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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 23, 2008

FOR IMMEDIATE RELEASE


BUSINESS OWNER SENTENCED FOR LEADING $17 MILLION

MORTGAGE FRAUD CONSPIRACY


            KANSAS CITY, Mo. – John F. Wood, United States Attorney for the Western District of Missouri, announced that a North Kansas City, Mo., business owner was sentenced in federal court today for leading a nearly $17 million mortgage fraud conspiracy.


             Raymond Walter Zwego, Jr., 60, of Kansas City, Mo., was sentenced by U.S. Chief District Judge Fernando J. Gaitan, Jr., this morning to 10 years in federal prison without parole. The court also ordered Zwego to pay $5,599,767 in restitution. The court also sentenced Zwego to three years in federal prison, to be served consecutively to the mortgage fraud sentence, for violating the terms of his supervised released on a prior bank fraud conviction, for a total sentence of 13 years.


             Zwego, who owned and operated Xpress Car Sales, Xpress Car Rental, North Mission Investments, Cobalt Blue, LLC, and Indigo Blue in North Kansas City, pleaded guilty on Oct. 19, 2007, to being the organizer and leader of the conspiracy to defraud Fieldstone Mortgage Corporation. Zwego also pleaded guilty to 11 counts of wire fraud related to the attempted sale of a residential property at 5034 Sunset Drive, Kansas City, Mo., at an inflated price. Conspirators falsely represented to Fieldstone Mortgage that the sale price was $1.2 million, while in reality, the actual sale price was $707,000. Conspirators sought to obtain a loan to purchase the property through a fraudulent loan application and other fraudulent documents.


             Zwego’s fraudulent real estate closings included approximately 60 properties with loans totaling approximately $16.9 million. Each of these loans was structured in such a way that Zwego received excess funds from the loan closings as a result of inflated appraisals and numerous false and fraudulent documents, as well as misrepresentations to multiple people and entities. These loans were financed by mortgages from 25 lenders, who sustained losses totaling approximately $5.6 million as a result of the fraud scheme. Zwego received approximately $3.3 million through his company, North Mission Investments, during the three-year scheme.


             Zwego is among seven co-defendants who have pleaded guilty to their roles in the conspiracy to commit mortgage fraud and the fifth of those defendants to be sentenced. Two co-defendants were convicted at trial for their roles in the conspiracy and also have been sentenced.


             Monty J. Kinman, 27, of Overland Park, was sentenced to two years and six months in federal prison without parole. The court also ordered Kinman to pay a $2,500 fine. Kinman was the regional manager and a loan officer at Soldi Financial in Overland Park.


              Rick A. Peterson, 34, of Lenexa, Kan., was sentenced to five years in federal prison without parole. The court also ordered Peterson to pay a $2,500 fine. Peterson was a title insurance officer and loan closer from January 2004 through January 2007, first at Parkway Title in Overland Park, Kan., then at Freedom Title in Kansas City, Mo., where he was the manager of the office.


             Kinman and Peterson were each convicted at trial on Nov. 7, 2007, for the mortgage fraud conspiracy as well as one count of wire fraud.


             James R. Rhoades, 48, of Kansas City, was sentenced to five years of probation and ordered to pay a $2,000 fine and $5,395,843 in restitution. Jeremy A. Plagman, 30, of Lee’s Summit, formerly an appraiser doing business as JET Appraisals in Lee’s Summit, was sentenced to two years of probation, including 30 days of home detention under electronic monitoring. As a condition of his probation, Plagman may not be involved in the real estate industry. Larry E. Barshaw, 57, and Linda M. Thompson-Barshaw, 59, of Kansas City, Kan., were each sentenced to five years of probation, including six months of home detention. The court also ordered each of these three co-defendants to pay a $2,000 fine, and ordered the Barshaws to pay $1,517,108 in restitution.


             The Barshaws were recruited as “straw buyers,” posing as purchasers of the Sunset Drive property. In reality, the Barshaws never intended to reside at the residence or to make payments on the mortgage. They were to be paid $40,000 for their role in the conspiracy. Thompson-Barshaw is the owner of Colormarc, Inc., a remodeling business that employs her husband, Larry Barshaw.


             James E. Coleman, 60, of Kansas City, pleaded guilty on May 21, 2007, to his role in the mortgage fraud conspiracy and four counts of wire fraud. Coleman is a Certified Public Accountant who formerly served as president of the board of a Kansas City magnet school. A sentencing hearing for Coleman is scheduled on Friday, Sept. 26, 2008.


             Michael Rodd, 54, of Olathe, Kan., pleaded guilty on June 27, 2007, to his role in the mortgage fraud conspiracy. Rodd was a real estate broker doing business as Heartland of America, Inc., in Olathe. Rodd is currently a fugitive and a federal warrant has been issued for his arrest.


            This case is being prosecuted by Assistant U.S. Attorneys Linda Parker Marshall and 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