real estate company owner, seven associates plead guilty
to $11 million mortgage fraud scheme
SPRINGFIELD, Mo. – Beth Phillips, United States Attorney for the Western District of Missouri, announced today that eight defendants, including the owner and associates of a Springfield, Mo., real estate company, have pleaded guilty in federal court to their roles in a nearly $11 million mortgage fraud scheme that involved more than two dozen residential properties.
Charles E. Walker, 58, of Springfield, and his wife, Linda F. Walker, 59, of Springfield, their son, Lee Edward Walker, 35, address unknown, James Powell, also known as “Jimmy,” 73, Steve Casarez, Jr., 34, Linda Hanks, 40, and Laura Greer, 42, addresses unknown, pleaded guilty in separate appearances this week before U.S. Magistrate Judge James C. England to participating in a conspiracy to commit wire fraud that began Nov. 1, 2004. Eddie Lee Rohrs, 38, address unknown, pleaded guilty last week to his role in the conspiracy.
In addition to the wire fraud conspiracy, Charles Walker pleaded guilty to participating in a conspiracy to commit money laundering.
Charles Walker was the owner of Charles E. Walker Realty, Inc., a real estate company that listed, marketed and sold residential real estate in the Springfield area. Walker Realty also solicited and maintained a group of investors who purchased real estate solely or primarily for investment purposes. Some of these investors were also real estate agents who worked at Walker Realty, or mortgage brokers who also brokered mortgage transactions for clients of Walker Realty.
Linda Walker, Lee Walker, and Hanks were licensed real estate agents and investors at the firm. Casarez was a mortgage broker and investor at the firm. Powell and Rohrs were also investors at the firm.
Conspirators caused mortgage lenders in at least 26 fraudulent real estate transactions to transmit loan proceeds totaling approximately $10,944,023. Conspirators defrauded mortgage lenders by submitting fraudulent loan applications to purchase residential properties at artificially inflated prices, with a significant portion of the purchase price of each home being returned to the buyer without the lender’s knowledge or consent.
As a result of the scheme, conspirators received illegal kickback payments of approximately $4.3 million. Most of the residential properties involved in the mortgage fraud scheme have gone into foreclosure.
Walker and co-defendants bought and re-sold residential real estate among themselves for increasingly inflated values. Appraisers prepared falsely-inflated appraisal reports to support the artificially inflated sales prices of the homes being purchased in the scheme. Mortgage brokers prepared loan applications with inflated monthly income figures and incorrect listings of assets and liabilities for the borrowers so that they would qualify to purchase the homes involved in the scheme. Charles Walker loaned money to borrowers for their down payments on homes, knowing that the source of the down payment funds was being concealed from the lenders. The loan applications also concealed from the lenders the fact that a portion of the loan proceeds would be funneled back to the borrowers, and others, after closing.
By pleading guilty, Charles Walker admitted that he participated in, directed and otherwise facilitated each of the fraudulent real estate transactions in relation to the 26 properties. He received more than $1 million in fraud proceeds as a result of the mortgage fraud scheme.
Linda Walker admitted that she was personally involved in two separate residential real estate transactions, for which she and Charles Walker received $110,579.
Lee Walker admitted that he was personally involved in seven separate residential real estate transactions, totaling more than $3 million, that were part of the mortgage fraud scheme, for which he received $359,938 in loan proceeds jointly with Charles Walker.
Powell admitted that he personally engaged in and facilitated eight fraudulent real estate transactions, totaling nearly $4.2 million, in which he bought and sold residential real estate through Walker Realty at artificially inflated prices. On two occasions, including the purchase of a $1.1 million home, he received illegal kickbacks after purchasing the homes. On six occasions, he sold homes to other investors at artificially inflated prices and paid kickbacks to the buyers. Powell received $921,962 as a result of these transactions.
Casarez admitted that he submitted five mortgage loan applications, totaling more than $2.3 million, for himself and on behalf of other borrowers, which he knew contained false income and employment information, and which failed to disclose the kickbacks that he and other borrowers received after closing.
Under federal statutes, each of the defendants are each subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $1 million and an order of resitituion. Walker is also subject to an additional sentence for his money laundering conspiracy conviction of up to 10 years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. 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 Robyn L. McKee. It was investigated by the U.S. Secret Service and IRS-Criminal Investigation.