Conspirator Sentenced To Over 4 Years In Jail In Mortgage Fraud Scheme

admin —  August 13, 2009 — Leave a comment

Earnest Lewis, 52, Takoma Park, Maryland, has been sentenced to 54 months in prison, followed by three years of supervised release, for conspiracy to commit wire fraud arising from a scheme in which the conspirators offered to help financially vulnerable individuals save their homes from foreclosure, and instead defrauded homeowners and mortgage lenders. Lewis previously agreed to forfeit $2,228,878, generated as proceeds of the criminal activity and Judge Chasanow will rule on that and the restitution amount at a later date.

According to Earnest Lewis’ plea agreement, from at least 2004 until May 2008, Michael Lewis aired television advertisements that targeted financially vulnerable individuals, representing that he could improve their credit, save their homes from foreclosure and assist them with bankruptcy. Viewers who called the toll-free number were scheduled to meet with Lewis, for a fee. At the meetings, Lewis solicited individuals to become MKL associates and to purchase a variety of for-fee services, such as the Michael K. Lewis Financial Diet for reducing debt, as well as a pre-paid legal plan, income tax return preparation services and bankruptcy petition preparation.

Together with Michael Lewis, 57, Takoma Park, Maryland, Earnest Lewis, and Winston Thomas, 43, New Carrollton, Maryland, specifically targeted individuals who owned and had equity in their homes, but were facing foreclosure on their homes because of their inability to make monthly mortgage payments. The co-conspirators fraudulently represented to the homeowners that their “lease/buy-back program” would help the homeowners to keep their homes. Michael Lewis and Winston Thomas, a senior loan officer with a mortgage lender, told the homeowners that the “good credit” of Earnest Lewis would be used to temporarily refinance their homes, that they had to sign their homes over to Earnest Lewis and that they could repurchase the homes in roughly one year, or once they regained their financial footing. During the interim, they could remain in their homes by paying “rent” and fees to Earnest Lewis. Their bank accounts were directly debited by an account belonging to co-conspirator Cheryl Brooke’s company “In the House Technologies.”

In order to induce lenders to provide funds for Earnest Lewis to purchase the homeowners’ houses, Thomas prepared and Earnest Lewis signed loan documents containing false financial information as to Earnest Lewis’ income and liabilities.

Cheryl Brooke, 52, Upper Marlboro, Maryland, and Winston Thomas pleaded guilty to their participation in the scheme and face a maximum sentence of 20 years in prison for the conspiracy to commit wire fraud. Brooke also faces a maximum of five years in prison for bankruptcy fraud and Thomas faces a maximum sentence of one year in prison for failure to file a federal income tax return. U.S. District Judge Deborah K. Chasanow has scheduled sentencing for Brooke and Thomas on September 11, 2009 at 2:30 p.m. and September 21, 2009 at 3:00 p.m., respectively. Michael K. Lewis pleaded guilty to conspiracy and bankruptcy fraud in connection with the scheme and is scheduled to be sentenced on September 3, 2009 at 9:30 a.m.

United States Attorney for the District of Maryland Rod J. Rosenstein made the announcement.

Our mortgage fraud prosecutions should serve as a warning to homeowners about the many con artists who take advantage of people who fall behind on their mortgage payments,” said U.S. Attorney Rod J. Rosenstein. “Earnest Lewis will now pay the price for defrauding banks and stealing homes from financially vulnerable homeowners.

United States Attorney Rod J. Rosenstein thanked the U.S. Postal Inspection Service, the Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation and the U.S. Trustee’s Office for their investigative work and recognized Maryland Attorney General Douglas F. Gansler and his office, particularly the Consumer Protection Division for their assistance. Mr. Rosenstein commended Assistant United States Attorneys Gina L. Simms, Stacy Dawson Belf and Jonathan Su, who prosecuted the case.

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