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JURY CONVICTS LOAN OFFICERS IN WIDESPREAD MORTGAGE FRAUD SCHEME
PLANO, Texas – Two north Texas women have been found guilty by a jury in a mortgage fraud scheme that targeted homes across North Texas and the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Azza Bassiouny, 44, of Dallas, and Kamilla Kirch, 65, of The Colony, Texas, were both convicted of conspiracy to commit mail fraud and wire fraud on July 14, 2011, following a four-day trial before U.S. District Judge Michael Schneider. The jury returned the verdict in less than 90 minutes.
According to the indictment, beginning in 2004, 40 individuals – among them, real estate agents, property finders, mortgage brokers and loan officers, title company attorneys, escrow officers, property appraisers, and straw buyers – conspired to defraud lending institutions by convincing them to approve mortgage loans for residential properties for which the property values had been fraudulently inflated. The indictment identified 114 residential properties located in cities throughout Texas, including Allen, Arlington, Cedar Hill, Coppell, Corinth, Cypress, Dallas, Flower Mound, Fort Worth, Frisco, Granbury, Heath, Highland Village, Houston, Keller, Lantana, Lewisville, Little Elm, Lubbock, Magnolia, McKinney, Plano, Roanoke, Southlake, Spring, The Woodlands, and Willis.
At trial, prosecutors presented the testimony of almost 30 witnesses to establish that Bassiouny and Kirch were loan officers who falsified loan applications in order to dupe lending institutions into making mortgage loans. Bassiouny and Kirch inflated income amounts, listed false employment information, and falsely designated purchases for primary residences. Bassiouny and Kirch also provided false documentation in support of the loan applications, including false verifications of employment, false verifications of deposits, false gift letters, false lease agreements, and fraudulent occupancy affidavits.
Prior to trial, 37 individuals pleaded guilty for their part in the mortgage fraud scheme. Scheme architect John Barry, 42, as well as Allyson Barry, age unknown, each pleaded guilty for their roles in creating or supporting the scheme. Title attorneys Daniel Ayers, 48, and Anthony Flores, 46, and escrow officer Debbie Fernie, 49, each pleaded guilty for their roles in closing the property transactions. Real estate agents Joy Beckner, 56, Sheri Brower, 49, Julie Hanley, 55, Elaine Powers, 63, and Michelle Strickland, 44, each pleaded guilty for their roles in concealing true property values in the property transactions. Loan officers Tim Dreslinski, 38, Jared Gowans, 32, Chris Howard, 43, Patty Peery, 57, Allison Ridgeway, 45, and Liz Smittle, 50, each pleaded guilty for their roles in falsifying loan applications for submission to lending institutions. Appraisers Elizabeth Altizer, 45, Pamela Ford, 49, and Josh Melton, 34, each pleaded guilty for fraudulently inflating the value of houses in their appraisals. Property flippers Frank Field, 52, Rita Hunter, age unknown, Shannon Jensen, 42, and Andrea Tannahill, 42, each pleaded guilty for serving as the conduit buyer/seller in property transactions that “flipped” immediately. And straw buyers William Barry, 66, Christopher Feagan, 34, Debbie Friedman, 65, Patrick Johnson, 38, Travis Jones, 39, Delisa Kearney, 50, Francis Kearney, 49, Barbara Muzeni, 49, David Muzeni, 45, Kathleen Muzeni, 45, Brett Relander, 35, David Sacco, 57, Ellen Summers, 63, and Clarence White, 55, each pleaded guilty for submitting false loan applications to lending institutions. The last remaining defendant is scheduled for trial in fall 2011.
“Mortgage fraud is a crime that not only causes steep financial losses to lending institutions but also ruins whole neighborhoods by tampering with house values," announced U.S. Attorney Bales. "We are committed to investigating and prosecuting those who try to profit from subverting the lending process – and those that abdicate their responsibilities to protect the system by engaging in the fraud themselves.”
Andrea D Whelan, Special Agent in Charge, IRS-Criminal Investigation, Dallas Field office, concurred, “Mortgage fraud creates so much harm to individuals, businesses and our economy, but today’s convictions are a strong reminder how serious our system considers this criminal activity. Those who line their pockets with profits from these schemes should know they will not go undetected and will be held accountable.”
Bassiouny and Kirch each face up to 20 years in federal prison on the conspiracy charges. A sentencing date has not been set.
This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force.
President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
This case is being investigated by the FBI and the IRS and prosecuted by Assistant U.S. Attorneys Christopher A. Eason, Richard J. Johnson, and Shamoil T. Shipchandler.