Wednesday, June 9, 2010

Mortgage Fraud Scheme in Greene and Cocke Counties

GREENVILLE, Tenn -- Thomas Duane Roderick, 43, of Wesley Chapel, Florida, entered a plea of guilty today in the United States District Court for the Eastern District of Tennessee at Greeneville, to wire fraud and money laundering, in connection with a mortgage fraud scheme he conducted from 2004 to 2007. Sentencing has been set for November 15, 2010, at 1:30 pm in United States District Court in Greeneville.

Roderick faces a maximum term of 20 years in prison, up to one million dollars in fines, and payment of restitution to the victims of his fraud.

The stipulated factual basis for the plea agreement included the following information:

Thomas Duane Roderick was a self-employed mortgage broker in the Greeneville, Tennessee. area, primarily from 2004 until 2007. Roderick processed real estate mortgage loans.

In January 2007, Roderick assisted Carol Holmstrom in obtaining refinancing for her home in Newport, in the Eastern District of Tennessee. Roderick persuaded Holmstrom to wire money from the equity from the refinancing to “MSI,” Roderick's investment company, which used the personal banking account Roderick shared with his daughter. Roderick improperly and illegally converted Holmstrom's funds to his own use and benefit. Roderick knew at the time the money was wired to him that he intended to use some of the money for his own benefit without Holmstrom's knowledge or permission. In addition, Roderick withdrew over $10,000 of that money on January 30, 2007, in three withdrawals, in individual amounts of $3,000, $4,000, and $4,500, to avoid the $10,000, financial transaction reporting requirements under federal law, and that the property involved in the financial transactions represented the proceeds of the above-described unlawful activity.

In March of 2007, Roderick persuaded Magdalene (Verdie) Sane to authorize funds from a farm credit loan to be wired to Roderick's account. In June 2007, Roderick persuaded Ms. Sane to have additional funds from another loan to be wired to Roderick's account. Roderick represented to Ms. Sane that he would use the money to pay off Ms. Sane's mortgages, and other outstanding bills. Roderick improperly and illegally converted most of Ms. Sane's money for his own use and benefit, without Ms. Sane's knowledge or permission. Roderick knew at the time he persuaded Ms. Sane to have the proceeds from the loans wired to his account that he intended to improperly and illegally covert some of the funds to his own use and benefit without Ms. Sane's knowledge or permission.

U.S. Attorney James R. Dedrick stated, “Mortgage fraud has become a plague on our economy and has created distrust in our financial institutions. Individuals and companies involved with defrauding the mortgage systems can expect quick investigation by federal authorities and prosecution for violations of federal law. Mortgage fraud has become a top priority of this District and the Department of Justice.”

On April 15, 2009, a nine-count indictment, which included the aforementioned charges, was returned against Thomas Duane Roderick by a federal grand jury sitting in Greeneville, Tennessee. This indictment was the result of an ongoing investigation by the United States Secret Service, Internal Revenue Service, U.S. Postal Inspection Service and the Greeneville Police Department. Nancy Stallard Harr, Assistant U.S. Attorney represented the United States.