Additional Sentences Handed Down in East Texas Mortgage Fraud Conspiracy
PLANO, Texas – Five additional defendants have been sentenced for their roles in a mortgage fraud conspiracy in the Eastern District of Texas, announced U.S. Attorney John M. Bales today. Sentencing hearings were held before U.S. District Judge Marcia Crone.
Djuana Pitts, 46, of DeSoto, Texas, pleaded guilty on Aug. 7, 2013, and was sentenced to 70 months in federal prison on Mar. 13, 2015, and ordered to pay restitution in the amount of $5,688,047.92.
Patricia Hines, 51, of Cedar Hill, Texas, pleaded guilty on Aug. 8, 2013, and was sentenced to 52 months in federal prison on Mar. 16, 2015, and ordered to pay restitution in the amount of $1,562,070.50.
Elliott Scott, 40, of Houston, Texas, pleaded guilty on Sep. 23, 2014, and was sentenced to 46 months in federal prison on Mar. 13, 2015, and ordered to pay restitution in the amount of $2,141,357.77.
Allen Kent Barnett, II, 39, of Rockwall, Texas, pleaded guilty on Feb. 18, 2014, and was sentenced to 31 months in federal prison on Mar. 13, 2015, and ordered to pay restitution in the amount of $3,156,943.31.
Jennifer Gipson, 49, of DeSoto, Texas, pleaded guilty on Oct. 28, 2013, and was sentenced to 12 months and a day in federal prison on Mar. 13, 2015.
Pitts pleaded guilty to conspiracy to commit money laundering. Scott, Barnett and Hines pleaded guilty to conspiracy to commit wire fraud. Gipson pleaded guilty to misprision of a felony.
According to information presented in court, from July 2006 to March 2008, in the Eastern District of Texas and elsewhere, these individuals along with other co-conspirators previously sentenced, were involved in a widespread mortgage fraud conspiracy.
Scott, as an appraiser, and Barnett, as an appraiser trainee, both played roles in the conspiracy to inflate values of properties and to conceal material information from the lending institution in order to induce the company to fund mortgage loans. In addition, Scott and Barnett caused the appraisals to falsely reflect that a co-conspirator or her companies were the public record owners of the properties so as not to alert the lending institutions that they were funding flip transactions.
Pitts, Hines and Gipson all worked at Esquire Title, LLC, a title company. Pitts was an operations manager and Hines and Gipson were assistant escrow officers. Gipson worked under the supervision of Pitts. Pitts and Hines facilitated loan closings. Pitts and Hines’ roles in the conspiracy were to conceal information from the lending institutions in order to induce the lending institution to fund mortgage loans. Pitts also knowingly allowed false title commitments to conceal the true record owner of the properties and false gift letters to be submitted to lending institutions. Pitts and Hines both caused false HUD-1s to be submitted to the lending institutions that indicated the borrowers were the source of the down payments when they both knew that third parties – sometimes even the sellers in the transaction – were the source of the down payments. Hines caused false occupancy affidavits to be submitted to lending institutions, which concealed that the same borrower had purchased multiple properties and indicated on all transactions that the borrower intended to occupy each property as his primary residence. Hines also caused false title commitments to be submitted to the lending institutions that concealed the fact that the property had recently been sold and was a flip transaction. Pitts authorized Hines’ distribution of the criminal proceeds of the underlying wire fraud scheme to other conspirators which distributions typically exceeded $10,000. Gipson knew of the conspiracy between these individuals to defraud lending institutions and she provided a misleading statement to federal agents from IRS Criminal Investigation and FBI when questioned about the conspiracy.
This law enforcement action 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.
This case was investigated by Federal Bureau of Investigation and IRS Criminal Investigation and prosecuted by Assistant U.S. Attorneys Andy Williams and Chris Eason.