Father and Son Guilty of Defrauding Department of Housing and Urban Development Through Texarkana Alzheimer’s Assisted Living Facility
SHERMAN, Texas – A 63-year-old Red Oak, Texas man has been sentenced for his role in a mortgage fraud scheme in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
Stephen King pleaded guilty on Mar. 16, 2015, to conspiracy to commit wire fraud in connection with his role in a Collin County Mortgage fraud scheme and was sentenced today by U.S. District Judge Marcia Crone to 33 months in federal prison. King was also ordered to pay restitution in the amount of $685,704.73.
According to information presented in court, in 2008, King, a real estate agent, conspired with Euneisha Hearns, Yvonne Gumaer and Kathy Moore to devise a scheme to defraud and obtain money and property by means of false pretenses for the purpose of executing a wire fraud scheme. King, who was assisting buyers in purchasing residences located in Dallas and Lancaster, Texas, referred the buyers to Hearns to obtain mortgage loans to purchase the property. King knew the buyers did not have sufficient funds to make down payments for the loans and he knew that Hearns would make materially false statements on the loan applications in order to obtain the loans. Hearns prepared and submitted materially false applications requesting loans and reflecting that the buyers had funds in bank accounts for the down payments. Hearns and King knew that these statements were false and the buyers did not have that amount of money in bank accounts or sufficient savings to make down payments. King knew the buyers’ down payments would be made from the proceeds of the loans. This scheme resulted in losses to mortgage lenders, including The Federal National Mortgage Association (Fannie Mae) and The Federal Home Loan Mortgage Corporation (Freddie Mac).
Hearns, 34, of Desoto, Texas, was indicted along with King by a federal grand jury on Apr. 11, 2013, for violations related to the mortgage fraud scheme. The indictment for Hearns was superceded in April 2014, for violations of conspiracy to commit money laundering and conspiracy to commit bank fraud. A trial date has not been set for Hearns. A federal indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, Hearns faces up to 40 years in prison for the conspiracy to commit money laundering and up to 20 years in prison for the conspiracy to commit bank fraud.
Others who have been sentenced in connection with the mortgage fraud scheme include:
Yvonne Gumaer, 68, of Galveston, Texas, who was sentenced to 33 months in federal prison and ordered to pay restitution in the amount of $791,782.89; and Kathy Moore, 50, of Broken Arrow, Oklahoma, who was sentenced to 24 months in federal prison and ordered to pay restitution in the amount of $774,377.63.
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 HUD-Office of Inspector General, IRS Criminal Investigation and Federal Housing Finance Agency-Office of Inspector General. The case was prosecuted by Assistant U.S. Attorneys Andy Williams and Chris Eason.