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Dallas Woman, Who Represented Herself as a Real Estate Investor, is Sentenced to 63 months in Federal Prison for Leading Scheme to Defraud Residential Mortgage Lenders

FOR IMMEDIATE RELEASE
February 28, 2013

Scheme Resulted in More Than $2 Million in Losses to Lenders

DALLAS — Patience Lavon Jackson, 50, of Arlington, Texas, was sentenced this afternoon by U.S. District Judge Jane J. Boyle to 63 months in federal prison and ordered to pay $2,801,661.95 in restitution, following her conviction for leading a conspiracy to defraud residential mortgage lenders, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. Judge Boyle ordered that Jackson surrender to the Bureau of Prisons on April 3, 2013.

Jackson pleaded guilty in October 2012 to one count of conspiracy to commit mail and wire fraud. Co-defendant Anthony Davis, Jr., 32, of Mesquite, Texas, who was employed as a branch manager at Bank of America, pleaded guilty in September 2012 to one count of conspiracy to commit mail fraud and is scheduled to be sentenced on April 25, 2013. Charlie M. Smith, Jr., of California, another co-defendant in the case, is facing similar charges in the Southern District of Ohio; that case will be adjudicated first.

According to documents filed, Jackson admitted that the purpose of her scheme was to fraudulently obtain residential real estate mortgages. Holding herself out as a real estate investor, she offered investment “seminars” at her house. Her “investment program” included recruiting straw purchasers, including Davis, to buy real estate and obtain fraudulent proceeds from the transaction by submitting fake invoices for consulting, upgrades or repairs. In facilitating the fraudulent real estate transactions, she caused title companies to mail closing documents to residential mortgage lenders who then wired money to fund the purchases.

Jackson facilitated the mortgage loans for the straw purchasers by submitting false and fraudulent loan applications and documents. These applications included material misrepresentations regarding the borrower’s income, employment, assets and intention to occupy the property. Jackson also admitted that she supplied cash to some borrowers to make it appear as if the individual had the necessary financial assets to qualify for the loan, when they did not. Jackson also admitted that she received disbursements from some of the sellers that were not disclosed to the mortgage lenders.

For example, in one transaction, she facilitated fraudulent loans for an individual, “A.B.,” who was recruited by co-defendant Smith, to purchase Jackson’s residence on Hillcrest Lane in Dallas. Jackson admits that she notarized loan and closing documents purportedly bearing A.B.’s signature, but that she never met A.B. She also admitted that she provided money to A.B. for his down payment to purchase the Hillcrest property. False statements on this loan application and other documents caused the two mortgage lenders, JP Morgan Chase and First Magnus Financial Corporation, to wire a total of approximately $1.42 million to a title company to fund A.B’s purchase.

Davis admitted that in 2007, he conspired with Jackson and others to commit mail fraud. He attended real-estate investment “seminars” at Jackson’s house. She also recruited him to be a straw purchaser in her scheme, convincing him to purchase an investment property on Vickery in Dallas. Davis admitted that his loan application contained numerous false statements, including the amount of available cash assets and his intention to occupy the property as his primary residence.

In another instance, Davis signed a false verification of deposit form for an investor, whom Jackson recruited, falsely representing that this person had a certificate of deposit (CD) at Bank of America valued at $74,595. This document was part of this individual’s loan package to purchase a home on Willis Avenue in Dallas.

The conspirators allowed the purchased properties to go into foreclosure by not making the monthly mortgage payments, which resulted in more than $2 million in losses to mortgage lenders.

(This case was prosecuted in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit http://www.stopfraud.gov/.

The investigation was led by the FBI. Assistant U.S. Attorney J. Nicholas Bunch is in charge of the prosecution.

 

 

 

 

 

 

 

 

 

 

 

 

 

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