Three Family Members Land in Federal Prison for Mortgage Fraud
|April 30, 2012|
Each Ordered to Pay Nearly $1 Million in Restitution
HOUSTON – Claymon “Butch” Trammell along with his wife and daughter, all of Houston, have been sentenced to federal prison for their respective roles in a multi-million dollar mortgage fraud scheme, United States Attorney Kenneth Magidson announced today. Trammell, 62, his daughter Michelle Trammell, 40, and wife Jeannettea Williams, 57, all previously entered guilty pleas for one count of conspiracy to commit wire fraud.
Today, United States District Court Judge Vanessa Gilmore heard testimony from a an man victimized by North Belt Mortgage, the business from which defendants ran their fraud scheme until 2005. The victim reported he went to North Belt looking for a home equity loan to help him buy an 18-wheeler for his business. The victim, who did not speak English, had been paying on his home mortgage for 21 years and was close to having the home paid in full. He testified that Claymon Trammell and others, using a translator, told him to sign papers for a home equity loan. Unbeknownst to the victim, however, he actually signed papers selling the home with Claymon Trammell receiving the equity from the sale. Not only did the victim get no money, but he was later forcibly evicted from his home because he no longer owned it, leaving him and his family homeless for a period of time.
Following the testimony, Judge Gilmore assessed the maximum punishment of 60 months each for Claymon Trammell and Williams, while Michelle Trammell was sentenced to 36 months. Each defendant was also ordered to pay $907,000 restitution to various mortgage lenders.
Evidence from the record indicated that from 2003 until the end of 2006, Claymon Trammell conspired with his wife and daughter to defraud mortgage lenders. Claymon Trammell and Williams recruited and paid individuals to act as straw borrowers on applications for residential mortgage loans, even though the borrowers had no intention of making payments on the mortgage loans or, in the case of homes supposedly purchased as “primary residences,” of residing in the homes. Some borrowers were used multiple times, including one borrower whose name and credit was used to “purchase” approximately 17 homes. Claymon Trammell pitched the scheme as an investment where the straw borrowers would not need any money down, would not be responsible for the monthly payments and would get money for the use of their name and credit.
At times during the scheme, Michelle Trammell and Williams were licensed mortgage loan officers. Michelle Trammell acted as a loan officer in the transactions and filled out loan applications in the names of borrowers and knowingly provided lenders with false information and documents about the borrower’s employment, income, assets and intent to occupy the purchased property. Michelle Trammell and Williams provided lenders with various false documents she knew to be false, including false verifications of deposit, false verifications of rent and false earnest money contracts.
There were more than 70 homes involved in the scheme, all of which went into payment default and most into foreclosure. The defendants caused lenders to fund loans to purchase more than 70 homes in the Houston area and personally benefitted, jointly, by funneling some of the loan proceeds to themselves via businesses they controlled and/or owned via bogus repair invoices and realtor and loan officer commissions.
All were allowed to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
The investigation leading to the charges was the result of an investigation conducted by agents of the FBI. Assistant United States Attorneys Belinda Beek, Jimmy Sledge and Kebharu Smith prosecuted the case with assistance from paralegal specialist Brenda Williams. The United States also received valuable assistance from Lone Star Legal Aid.