Lanny Ross, 66, Leawood, Kansas, pleaded guilty to one count of conspiracy in a $25 million mortgage fraud scheme.
In his plea, Ross, a real estate appraiser, admitted he and co-defendants conspired to commit bank fraud and money laundering in a scheme to manipulate home buyers and housing appraisals, and to submit fraudulent mortgage loan applications to federally insured lenders.
Co-defendants in this case who already have entered guilty pleas include: Judy Brumble, Steve Middleton, Angela Parenza, and Elizabeth Hessel. Co-defendants awaiting trial include F. Jeffrey Miller, Todd Earnshaw, Brian Rouse, and James Moser.
In his plea, Ross admitted the conspirators produced advertising offering home buyers with poor credit and financial problems the opportunity to buy homes built by Jeffrey Miller with little or no down payment. By establishing a one-stop shop where buyers could choose a home and apply for financing, the conspirators were able to control the flow of information submitted to lenders. The conspirators used fraudulently inflated real estate appraisals to cause lenders to make loans up to, and in excess of, 100 percent of the property values. They also encouraged buyers to move into the homes before closing and then increased the price of the houses at closing. As a result of the fraud, lenders issued more than $25 million in loans.
Ross is set for sentencing Sept. 8, 2008. He faces a maximum penalty of 5 years in federal prison and a fine up to $250,000.
U.S. Attorney Eric Melgren commended the Internal Revenue Service – Criminal Investigation, Housing and Urban Development – Office of Inspector General, Assistant U.S. Attorney Richard Hathaway, and Assistant U.S. Attorney Christine Kenney for their work on the case.