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May 13, 2009

MORTGAGE BROKER CONVICTED FOR MORTGAGE FRAUD

(HOUSTON) – Clarence Lewis III has been was found guilty of devising a scheme to defraud residential mortgage lenders by misstating information material to the lending decision, acting United States Attorney Tim Johnson announced today. U.S. District Judge Lynn Hughes found Lewis guilty of engaging in a mail and wire fraud conspiracy and four counts of wire fraud following a bench trial that concluded today.

Lewis held a mortgage broker license and operated Motown Mortgage Group in addition to holding a realty broker license and operating Lewis & Associates Realtors. Lewis used both companies during his scheme to defraud residential mortgage lenders. He and his co-conspirators recruited individuals with good credit to apply for the mortgage loans, many of whom were promised money for signing loan documents and attending the real estate closing at the title company where the mortgage notes were signed. Lewis further induced them to act as borrowers by stating he would make sure the mortgage notes were paid and he would ensure the property was managed until it could once again be sold. From January 2002 to Jan. 16, 2008, Lewis is alleged to have obtained more than $12,000,000 in fraudulently obtained loans.

Lewis and his co-conspirators caused loan packages containing false and fraudulent statements to be prepared and forwarded to the lenders to induce the lenders to loan 100% of the sales price. Some documents were altered and others were fabricated in an effort to support the false and misleading statements on the loan applications. In addition, Motown Mortgage Group ordered appraisals on these properties and represented to the lenders that each appraisal was conducted by an independent licensed appraiser when, in fact, many of the appraisals were prepared by an unlicensed individual who had unlawfully appropriated the license of two appraisers and used their licenses without their knowledge. 

Lewis negotiated the sales price with sellers of the property which involved increasing the sales price rather than lowering it. The sales price included funds which were transferred to Lewis’ assumed name bank account, Astro Construction. From this account, Lewis would provide funds to the borrowers and others who participated in the transaction.

Lewis was found guilty of conspiracy to commit mail and wire fraud and as well as four counts of wire fraud. Each count carries a possible maximum penalty of up to 20 years imprisonment and up to $250,000 fine. Lewis was taken into custody after the court rendered its verdict. Sentencing is scheduled for Aug. 17, 2009, at 2:30 pm.

This prosecution was the result of a joint investigation being conducted by agents of the FBI and the Internal Revenue Service-Criminal Investigation. The case was prosecuted by Assistant United States Attorney Melissa Annis.

 

 

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