Three Plead Guilty in Mortgage Fraud Scheme
Las Vegas, Nev. - Three former employees of local lending institutions who created fictitious and fraudulent loan documents to obtain mortgage loans, have pleaded guilty in United States District Court to felony charges, announced Daniel G. Bogden, United States Attorney for the District of Nevada. BETH LANZA, age 49, and MICHAEL CARTRON, age 32, both of Huntsville, Alabama, pleaded guilty this morning before U.S. District Judge Larry R. Hicks, to one count of Wire Fraud, and GARY STEPHENS, age 54, also of Huntsville, Alabama, pleaded guilty to one count of making a false statement to the U.S. Department of Housing and Urban Development (HUD). LANZA and CARTRON are facing up to 30 years in prison and a $1,000,000 fine. STEPHENS is facing up to two years in prison and a $250,000 fine.
According to the court records, from August 1998 through October 1999, BETH LANZA and MICHAEL CARTRON were employed by National City Mortgage in Las Vegas. LANZA was the Regional Manager and CARTRON was a loan officer. During this period, LANZA and CARTRON accepted loan applications from fictitious or "straw" borrowers that contained fraudulent statements and documents. The fraudulent documents were material to decisions to fund the mortgage loans and included documents such as, bank statements, pay stubs, tax forms, gift letters, etc. The defendants used the false statements and documents to obtain the mortgage loans in order to receive commissions. During this period, LANZA and CARTRON were responsible for the submission of 17 fraudulent loan applications and a loss to National City Mortgage of $185,126.
LANZA and CARTRON also admitted that during 1997 and 1998, while they were employed at another lender in Las Vegas, Mortgage Capital Resources, they submitted false information and documents in order to obtain mortgage loans for borrowers who would not have otherwise qualified for mortgage loans, resulting in losses to HUD of approximately $105,580.
Defendant GARY STEPHENS, also a loan officer at Mortgage Capital Resources, admitted that on March 11, 1998, he provided false documents to HUD to support inflated income figures on a loan application. These documents included fictitious tax returns, and a fraudulent letter from the borrower's employer and fraudulent gift letter.
"Prosecuting individuals who commit white collar offenses such as mortgage fraud, wire fraud, identity theft, and money laundering, etc. is a high priority in the District of Nevada," said U.S. Attorney Bogden. "The persons who commit these type of offenses prey on the poor, elderly and disadvantaged, and cost government agencies such as HUD enormous sums of money. Today's guilty pleas send a strong message that we are committed to using the full force of federal law to identify, arrest and prosecute anyone who commits this type of crime."
The defendants are scheduled for sentencing before Judge Hicks at 10:00 a.m. on May 3, 2004. The actual sentences will be dictated by the United States Sentencing Guidelines, which take into account a number of factors, and will be imposed in the discretion of the Court. They are released on bond pending sentencing.
Two other individuals charged in the case, Horace Smith and Zina Sagona, both loan officers with Mortgage Capital Resources, also pleaded guilty to felony offenses. Smith was sentenced on October 21, 2003, to 37 months in prison, and Sagona is scheduled for sentencing before Judge Hicks on March 22, 2004.
This case was investigated by Special Agents with the FBI and Office of the Inspector General for HUD, and is being prosecuted by Assistant United States Attorney Brian Pugh.