FAMILY MEMBERS SENTENCED IN MORTGAGE FRAUD CASE THAT CAUSED A $1.3 MILLION LOSS TO FINANCIAL LENDERS
DALLAS — Lionel Alexander and his nephew, Blake Alexander, were sentenced this morning by Chief U.S. District Judge Sidney A. Fitzwater to 78 months and 18 months, respectively, for their roles in a mortgage fraud scheme that resulted in an approximate $1.3 million loss for financial lenders, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. In addition, Judge Fitzwater ordered that the Lionel Alexander pay $1,339,305.23 in restitution - $622,879.01 of which is to be paid jointly and severally with Blake Alexander. Both were ordered to surrender to the Bureau of Prisons on March 20, 2012.
Lionel Alexander, 50, of Dallas, pleaded guilty in November 2011 to one count of mail fraud; he was the president and CEO of American Family Mortgage in Dallas. Blake Alexander, 27, of Lafayette, Louisiana, pleaded guilty in August 2011 to one count of conspiracy to make a false statement to a financial institution; he worked as a loan processor for American Family Mortgage.
According to plea documents filed in the case, in August 2005, Lionel Alexander began recruiting straw borrowers by telling them that they would be purchasing investment properties in which individuals with bad credit could live. He represented that he would find the homes and the tenants and told the straw borrowers that tenants would rent-to-own the houses while their credit was being repaired, which would take six months to two years. Once their credit was repaired, they would purchase the homes from the straw borrowers.
The mortgage fraud scheme involved 48 properties in the DFW area and resulted in more than one million dollars in loss. In furtherance of the scheme, in August 2006, Lionel Alexander falsified and altered loan application documents for the purchase of properties located on Wood Acre Road and Creek Meadow Drive in Fort Worth, Texas, and on Harborview Blvd. in Rowlett, Texas, by an individual, “J.R.” He misrepresented J.R.’s wages, falsely stated the property would be her primary residence and failed to disclose other properties J.R. purchased.
As part of the scheme, Blake Alexander entered into an agreement with Lionel Alexander to make a false statement to obtain a loan from Washington Mutual Bank. Blake Alexander altered loan documents that he prepared and submitted to Washington Mutual on behalf of the straw borrower sot that the borrower would qualify for the loan. In March 2006, Blake Alexander sent a residential loan application to Washington Mutual reporting that the straw borrower, “S.L.,” was purchasing property located on Indian Creek Drive in Desoto as his primary residence; that S.L. was earning $15,000 per month; that S.L. had a bank account at Bank of America; and that S.L. earned $4,000 per month in rental income. Blake Alexander admitted altering Bank of America statements to falsely reflect that they were S.L.’s bank statements. He also faxed a fake letter to Washington Mutual stating that S.L. was entering into a business agreement that would generate between $15,000 and $20,000 per month for S.L. Based on these false representations, Washington Mutual loaned $300,000 to S.L. and American Family Mortgage was paid $6,000 for the transaction.
Mortgage fraud is a major focus 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. For more information about the task force visit: www.stopfraud.gov.
The case was investigated by the FBI. Assistant U.S. Attorney Errin Martin was in charge of the prosecution.
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