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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of Pennsylvania

FOR IMMEDIATE RELEASE
Thursday, February 19, 2015

Mortgage Fraud Schemers Get 15 Year Prison Terms

PHILADELPHIA – Walter Alston Brown, 47, of Providence Forge, Virginia, and Glen Allen, Virginia, and Cynthia Evette Brown, 53, of Philadelphia, PA, were each sentenced today to 180 months in prison for their roles in a multi-million dollar mortgage fraud scheme.  Walter Brown was a mortgage broker with First Horizon Home Loans, Foxworth Inc., Carteret Mortgage, and Advantage Lending and was one of the four owners of KREW Settlement Services, a real estate settlement company.   He was convicted on October 17, 2014 of conspiracy to commit loan and wire fraud, false statement in an FHA loan, loan fraud, and tax evasion. Cynthia Brown was convicted of conspiracy to commit loan and wire fraud, false statement in an FHA loan, loan fraud, and wire fraud.  The two were among 17 defendants charged in the case.

 

In addition to the prison terms, U.S. District Court Judge Berle M. Schiller ordered Walter Brown to pay $7,213,123 in restitution to the victims of his fraud plus another $31,903 in restitution to the IRS; Cynthia Brown was ordered to pay $7,488,608.48 in restitution.  Both defendants were also ordered to complete five years of supervised release.

 

Between May 2004 and February 2009, the conspirators inflated purchase prices on loan documents for more than 100 Philadelphia properties resulting in more than $20 million in fraudulent loan proceeds.  The scheme involved identifying distressed properties to purchase, typically in the West Philadelphia area, recruiting “straw buyers” whose credit history and personal information were used to purchase the properties, obtaining mortgage loans, and taking title to the properties, when, in reality, the properties were owned and controlled by the defendants.  Mortgage loan applications were then prepared in the names of the straw buyers containing a host of false information, including false purchase prices, false employment and income information, and false statements about the straw buyers living in the properties.  Cynthia Brown falsely verified that many of the straw buyers worked for her employer, Unicco Service Company, when they did not.  The defendants and their conspirators falsely prepared deeds and settlement statements (referred to as "Form HUD-1") – one for the seller that showed the actual agreed-upon purchase price and a false one for the lender that showed the grossly inflated purchase price.  They also created false title insurance policies for the lenders.

 

After the loans funded, the seller was paid the agreed-upon purchase price, and the difference between the actual purchase price and the false purchase price quoted to the lender was shared with and distributed among the defendants.

 

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, and the Department of Housing and Urban Development’s Office of Inspector General.  It was prosecuted by Assistant United States Attorney Michael S. Lowe.

Topic(s): 
Mortgage Fraud
Updated February 19, 2015