Edward “Ted” House, 38, Louisville, Kentucky; Nathan Frisbie, 39, Louisville, Kentucky; Khaliad Raheem, a/k/a Dwayne Cross, 42, Louisville, Kentucky; and Jerry Crenshaw, 36, Louisville, Kentucky, were sentenced on February 18, 2009, after previously pleading guilty to conspiracy to commit wire fraud and bank fraud in violation of 18 U.S.C.§ 371, bank fraud in violation of 18 U.S.C. § 1344, and wire fraud in violation of 18 U.S.C. § 1343. House and Frisbie were each sentenced to 18 months a piece and ordered to pay approximately $2.7 million in restitution to multiple mortgage lenders. Crenshaw was sentenced to 12 months and ordered to pay approximately $400,000 in restitution to multiple mortgage lenders. Raheem was sentenced to 25 months and ordered to pay approximately $1 million in restitution to multiple mortgage lenders.
The Indictment alleges that between January 1, 2000, and May 30, 2003, House, Frisbie, Raheem, and Crenshaw conspired with one another to defraud two residential mortgage lenders. The indictment identifies 24 separate fraudulent loan transactions, totaling approximately $1.5 million, in which the named defendants participated. The defendants defrauded the mortgage lenders through various means. Generally, they provided the lenders with false borrower background information in order to fraudulently induce the funding of individual loans. The defendants would provide lenders with false employment and financial information of an applicant in order to get a loan approved. In addition, they would often misrepresent the payment of earnest money or a deposit from a buyer to a seller. The lenders relied on all theses false representations in order to make its decision whether to fund a loan.
For example, House, Frisbie, and, Raheem were fraudulently involved in a $63,750 mortgage loan for the purchase of property located at 801 Dearborn Street, Louisville, Kentucky. In order to fraudulently induce the lender, ABN Mortgage Group, to fund the loan, they provided false and fraudulent information in support of the loan. The fraudulent information included the following: false and fraudulent employment information of the buyer and a closing statement that reflects a fraudulent sales price in that no earnest money or deposit was actually paid by the buyer. Count 1 of the Indictment alleges 21 separate instances in which the defendants conspired to defraud mortgage lenders through manners similar to the above example.
The indictment further charges the defendants with counts of wire fraud and bank fraud. For example, Count 2 charges House, Frisbie, and Crenshaw with obtaining a $59,850 loan for property located at 2712 Algonquin Parkway, Louisville, Kentucky, from National City Mortgage Company under false and fraudulent pretenses. They defrauded National City by providing false information regarding the buyer’s employment and financial information, as well as misrepresenting funds paid by the buyer to the seller. Counts 3 through 5 charge the defendants with similar schemes involving different properties and different lenders.
At the sentencing, the United States presented evidence that a the action of the defendants caused a $2.7 million total loss to multiple mortgage lenders. The defendants were ordered to pay full restitution for the amounts they were responsible.
The was prosecuted by Assistant United States Attorney Bryan Calhoun, and it was investigated by the Federal Bureau of Investigation.