two Convicted of Mortgage Fraud Conspiracy
Madison, Wis. - John W. Vaudreuil, United States Attorney for the Western District of Wisconsin, announced that on Thursday June 16, 2011, Traci Gray, 34, and Samantha Johnson, 34, both of Madison, Wis., were convicted of filing a false loan application and conspiracy following a four-day jury trial in federal court in Madison.
U.S. District Judge Barbara B. Crabb scheduled sentencing for Gray on August 26, 2011, at 1:00 p.m., and for Johnson on August 25, 2011, at 1:00 p.m. Gray and Johnson face a statutory maximum penalty of 30 years in federal prison on the false loan application charge, and five years in prison on the conspiracy charge.
At trial, the government established that Gray worked as a legal secretary making $36,000 per year in Madison, when she decided in late 2006 to purchase a $322,000 new home in Prairie du Sac with her boyfriend. Because of credit problems, Gray and her boyfriend could not qualify for the mortgage loan. Johnson offered to stand in as a straw buyer for the home and co-signor on the mortgage loan, provided that Gray would refinance the mortgage in two years and remove Johnson's name from the mortgage loan.
At the November 15, 2006, closing on the home, Gray and Johnson signed a loan application that included a number of falsities, including: (1) they were currently living together; (2) they intended to occupy the new home together as their primary residence; (3) they made a combined total gross monthly income of $11,000; (4) they had no dependents; and (5) Gray had been working as a legal secretary for two years. The government established that all of these assertions on the loan application were false. The government also established that neither defendants disclosed the truth to the lender regarding the plan to have Johnson as a straw buyer and non-occupant in the house.
Brian Bowling, 45, formerly of Sun Prairie, Wis., testified at the trial that he was the mortgage broker on this loan and participated in the conspiracy to commit loan fraud. Bowling was sentenced to 51 months in federal prison in August 2010 after pleading guilty in a related case.
This case is part 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.
The charges in this case are the result of an investigation conducted by the Madison office of the Federal Bureau of Investigation. The prosecution of this case is being handled by Assistant U.S. Attorney Daniel J. Graber.
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