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March 11, 2009

HOUSTON RESIDENT PLEADS GUILTY TO MORTGAGE FRAUD

(HOUSTON) - Frankthea Williams, 33, of Houston, has been convicted of conspiring to commit mail fraud and wire fraud as part of a scheme to defraud residential mortgage lenders and engaging in a financial transaction involving criminally derived property, acting United States Attorney Tim Johnson announced today. Williams pleaded guilty in federal court Tuesday, March 10.

Williams was charged in a criminal indictment with five other defendants now pending trial before U.S. District Court Judge Keith Ellison for a mortgage fraud scheme involving the recruitment of individuals to purchase residential properties at or near 100% financing using their good credit. The borrowers were paid from the loan proceeds for their participation in the acquisition of the property, while loan officers at mortgage brokerage offices were utilized to furnish false and fraudulent information to the lenders. Loan proceeds would be disbursed to one or more of the conspirators through checks or wire transfers from the title company to a bank account established in an assumed name.

Williams worked with others to recruit individuals to let the defendants use their good credit to purchase residential properties in the Houston area. Each loan was obtained using false and fraudulent information, and money was withdrawn by the defendants at the closing of the real estate transaction. The residential loans obtained by the defendants during the scheme eventually fell into default and were foreclosed by the mortgage companies.  

At this afternoon’s hearing, Williams admitted that following a Dec. 15, 2005, real estate transaction to purchase a property located on the 3300 block of Yupon Street in Houston that was funded by $455,000 obtained through the use of materially false and fraudulent statements and representations, Williams received a $28,500 check from a co-conspirator indicating the payment was related to the above described real property transaction. Williams deposited the check into her personal bank account the same day and proceeded to spend the vast majority of the $28,500 on personal items and which was profit obtained from the scheme.

In January 2006, a second residential loan was fraudulently obtained to purchase a property located at on Briar Hollow Lane in Houston for $434,500. Williams admitted to having checks from a co-conspirator totaling $14,000 as profits from this transaction. 

Williams faces a maximum 20-year prison term and a maximum fine of $250,000 as a result of her guilty plea to count one, charging conspiracy to commit mail and wire fraud, and a term of imprisonment of not more than 10 years and a fine of $250,000 or twice the amount involved in the transaction for count eight, charging her with engaging in a financial transaction in criminally derived property. Additionally, Williams may receive a term of supervised release after imprisonment of up to three years. Judge Ellison has set sentencing for May 27, 2009.  Williams will be permitted to remain free on bond pending sentencing.

The investigation leading to the charges was conducted by the FBI, Department of Housing and Urban Development - Office of Inspector General and the Internal Revenue Service - Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Melissa Annis.

 

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