Former Online Mortgage Broker Employee and Broker Sent to Prison

Allison Tussey —  December 16, 2014 — 1 Comment

Jarrod Beddingfield, 38, Waxhaw, North Carolina, a former online mortgage broker employee, and Steve Rosene, 43, Newport Beach, California, Beddingfield‘s California-based mortgage broker conspirator, were sentenced by U.S. District Judge Robert J. Conrad, Jr. for their roles involving computer theft of mortgage leads from a nation-wide online mortgage broker.

Beddingfield was sentenced to 15 months in prison, followed by two years of supervised release. Rosene was sentenced to 27 months in prison and three years of supervised release. Judge Conrad also entered forfeiture money judgments of $1.9 million for Rosene and $60,000 for Beddingfield. Both defendants were ordered to pay restitution to the company, the amount of which will be determined by the court at a later date.

According to filed court documents and court proceedings: Beddingfield, a former employee of the victim company, sold company-employee log-in credentials to California-based Rosene. Rosene then used the stolen log-in credentials to access the victim company’s database and downloaded approximately 41,435 mortgage leads for use by two mortgage companies associated with Rosene. Rosene also sold the stolen log-in credentials to two other California mortgage brokers, Brian Rich and Marcus Avritt, co-owners of Chapman Capital, Inc., a mortgage broker firm that also did business as “Home Loan Consultants.” Rich and Avritt used their unauthorized access to the victim company’s database to steal approximately 14,137 mortgage leads.

The mortgage leads were stolen in 2007 prior to the victim company’s change of all employee log-in credentials in early January 2008. The stolen mortgage leads consisted of data on consumers who had used the victim company’s online mortgage lending exchange network to apply for new and refinanced mortgage loans. Mortgage loan consumers used the internet to access the company’s network and to complete online mortgage application forms containing contact, non-public financial data and other information necessary to complete the application process.

Court records indicate that the information submitted through this online process comprised the company’s mortgage referral information, known individually as “mortgage leads.” The mortgage referral information, which contained thousands of such individual mortgage leads, was valuable information because it consisted of mortgage loan consumers who were ready, willing and financially-able to close on mortgage loans, refinancing loans and home equity loans. By obtaining this information without paying the requisite fees and dues, Rosene avoided paying the victim company an estimated $1.9 million for the stolen mortgage leads. Rich and Avritt avoided paying the victim company an estimated $745,152 for the stolen mortgage leads.

Beddingfield and Rosene pleaded guilty in July 2013 to one count of conspiracy to illegally access and use the victim company’s customer database. Rosene also pleaded guilty to
an additional count of illegally accessing and using the victim company’s database. As previously reported by Mortgage Fraud Blog, the other two co-defendants, Avritt and Rich, were sentenced to 15 months and 24 months in prison respectively for conspiracy to illegally access and use the victim company’s customer database.

Beddingfield and Rosene have been released on bond and will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. All federal sentences are served without the possibility of parole.

U.S. Attorney’s Office for the Western District of North Carolina and John A. Strong, Special Agent in Charge for the Federal Bureau of Investigation, Charlotte Division, announced the sentences.

The investigation was handled by the FBI. This prosecution is handled by Assistant United States Attorneys Tom O’Malley, Ben Bain-Creed and Tiffany Mallory of the U.S. Attorney’s Office in Charlotte.

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