July 25, 2008
TWO METRO DENVER REALTORS CONVICTED OF MORTGAGE FRAUD SCHEME
DENVER – A jury last Friday returned guilty verdicts against Linda Edwards, age 55, of Centennial, and Ladonna Mullins, age 73, of Denver, for implementing a complex mortgage fraud scheme. The verdict was handed down following a fourteen day jury trial before U.S. District Court Judge Marcia S. Krieger. The jury deliberated for a day and a half before reaching their verdict. Edwards and Mullins are scheduled to be sentenced by Judge Krieger on December 15, 2008. The guilty verdicts were announced today by United States Attorney Troy Eid, IRS Special Agent in Charge, Criminal Investigation, Christopher Sigerson, and Special Agent in Charge of the Office of Inspector General for Housing and Urban Development (HUD) Phyllis Robinson.
Edwards and Mullins were first indicted by a federal grand jury in Denver on February 17, 2005. The two were convicted of wire fraud, making false statements, false use of a social security number, making false statements to a financial institution, and criminal forfeiture on July 25, 2008.
According to the indictment, as well as evidence presented during the trial, Ladonna Mullins worked as a real estate agent doing business through “LaDonna’s Realty and Management,” which was located and conducted business in Denver, Colorado. Linda Edwards worked as a real estate agent doing business through “Affable Realty,” which was located and conducted business in Aurora, Colorado. Both businesses were used to further mortgage fraud.
Starting in March 1999 through in July 2004, the defendants, aided and abetted by others, devised a scheme to defraud and to obtain money and property by means of fraudulent representations and promises from mortgage companies that funded federally insured loans. As part of the scheme, Edwards and Mullins and others working with them would locate buyers who desired to purchase a residence but were unable to qualify for a mortgage using the buyers’ accurate credit history, income and employment, and/or other financial information.
The defendants and others working with them, would assist the buyers who could not qualify for an FHA-insured mortgage legitimately by one or more of the following means: (i) obtaining a false Social Security number (“SSN”) for the buyer, which would conceal the buyer’s unfavorable credit history; (ii) creating false W-2s or other income documents, which would inflate or wholly create income that would purportedly be available for the buyer to make mortgage payments; (iii) creating false verifications of rent (“VOR”) or employment (“VOE”) to support false information about the buyer; (iv) creating false alternate credit letters, which would create an appearance that the buyer had a history of paying debts timely; and (v) creating false “gift letters,” which falsely stated that the buyer had an appropriate source of funds for the down payment, and/or other false financial information.
Upon sentencing, Edwards could be sentenced to: Wire Fraud, either up to 5 years or up to 20 years imprisonment (depending on the date of the crime); $250,000 fine; restitution; and 3 years supervised release. False Statements: 5 years imprisonment; $250,000 fine; and 3 years supervised release. False Use of Social Security Number: 5 years imprisonment; $250,000 fine; and 3 years supervised release. The prosecution will also seek forfeiture of all property involved in the scheme as determined by the court.
Mullins could also be sentenced to: Wire Fraud, 5 years imprisonment; $250,000 fine; restitution; and 3 years supervised release. The prosecution will also seek forfeiture of all property involved in the scheme as determined by the court.
“The United States Attorney’s Office has devoted substantial time, energy and resources into prosecuting mortgage fraud,” said United States Attorney Troy Eid. “For the last four years our office has quietly worked its way from buyers who lied on their mortgage applications all the way up to the real estate agents and mortgage bankers who participate in the fraud.”
“Every year, fraudulent real estate schemes victimize individuals and businesses in our community, including struggling low-income families lured into home loans they can't afford,” said Christopher Sigerson, IRS Special Agent in Charge, Criminal Investigation.
This case was investigated by the Office of the Inspector General for the Department of Housing and Urban Development (HUD OIG), and the Internal Revenue Service Criminal Investigation Division (IRS CID).
The case is being prosecuted by Assistant U.S. Attorneys Patricia Davies and Matt Kirsch.
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