Forty Indicted in Major East Texas Mortgage Fraud Scheme

Allison Tussey —  March 17, 2010 — 11 Comments

40 individuals have been arrested and charged in connection with a major mortgage fraud scheme in the Eastern District of Texas. The 16-count indictment was returned by a federal grand jury on March 10, 2010, and includes one count of conspiracy to commit mail and wire fraud, 12 counts of mail fraud, and three counts of money laundering.

The 40 defendants, from Texas, Florida, Massachusetts, Tennessee, and Georgia, are charged as follows:

  • John Barry, conspiracy, mail fraud, money laundering
  • Allyson Barry, conspiracy
  • Joy Beckner, conspiracy, mail fraud
  • Sheri Brower, conspiracy, mail fraud
  • Julie Hanley, conspiracy, mail fraud
  • Elaine Powers, conspiracy, mail fraud
  • Michelle Strickland, conspiracy
  • Shannon Jensen, conspiracy
  • Frank Field, conspiracy, mail fraud
  • Rita Hunter, conspiracy
  • Andrea Tannahill, conspiracy, mail fraud
  • Azza Bassiouny, conspiracy
  • Tim Dreslinski, conspiracy
  • Jared Gowans, conspiracy
  • Chris Howard, conspiracy, mail fraud
  • Kamilla Kirch, conspiracy
  • Patty Peery, conspiracy
  • Allison Ridgeway, conspiracy
  • Liz Smittle, conspiracy, mail fraud
  • Daniel Ayers, conspiracy, mail fraud
  • Debbie Fernie, conspiracy
  • Anthony Flores, conspiracy, mail fraud
  • Elizabeth Altizer, conspiracy, mail fraud
  • Pamela Ford, conspiracy, mail fraud
  • Joshua Melton, conspiracy
  • William Doug Mitchell, conspiracy, mail fraud
  • William Barry, conspiracy
  • Christopher Feagan, conspiracy, mail fraud
  • Debbie Friedman, conspiracy
  • Patrick Johnson, conspiracy
  • Travis Jones, conspiracy
  • Delisa Kearney, conspiracy, mail fraud, money laundering
  • Francis Kearney, conspiracy, mail fraud
  • Barbara Muzeni, conspiracy, mail fraud
  • David Muzeni, conspiracy, mail fraud, money laundering
  • Kathleen Muzeni, conspiracy
  • Brett Relander, conspiracy
  • David Sacco, conspiracy
  • Ellen Summers, conspiracy, mail fraud, money laundering
  • Clarence White, conspiracy

According to the indictment, beginning in 2004, John Barry, 41, Windemere, Florida, owned and operated, TKI Group, Inc. and JAB Consulting, businesses out of Florida through which he solicited real estate agents, property finders, mortgage brokers, title company attorneys or escrow officers, property appraisers, and straw buyers to facilitate this scheme. The purpose of the scheme was to defraud lending institutions by convincing them to approve mortgage loans for residential properties for which the property values had been fraudulently inflated.

The indictment specifically lists 114 residential properties located in Texas:

  • 1221 San Saba Court, Allen, Texas
  • 4500 Springhill Estates Drive, Allen, Texas
  • 518 Gunnison Drive, Arlington, Texas
  • 2513 Rolling Oaks, Cedar Hill, Texas
  • 500 Green Ridge Drive, Coppell, Texas
  • 3109 Blue Jay Drive, Corinth, Texas
  • 16551 Cypress Bridge Drive, Cypress, Texas
  • 7329 Elmridge Drive, Dallas, Texas
  • 5812 Encore Drive, Dallas, Texas
  • 14420 Overview Circle, Dallas, Texas
  • 7415 Spring Valley Road, Dallas, Texas
  • 4352 Voss Hills Place, Dallas, Texas
  • 5804 Willow Wood Lane, Dallas, Texas
  • 5212 Balmoral Lane, Flower Moun, Texas
  • 4609 Hampshire Drive, Flower Mound, Texas
  • 4704 Mariner Court, Flower Mound, Texas
  • 3100 Oak Crest Drive, Flower Mound, Texas
  • 4708 Seafarer Court, Flower Mound, Texas
  • 4716 Seafarer Court, Flower Mound, Texas
  • 8624 Canyon Crest, Fort Worth, Texas
  • 8417 Crosswind Drive, Fort Worth, Texas
  • 12261 Fairway Meadows Drive, Fort Worth, Texas
  • 12264 Fairway Meadows Drive, Fort Worth, Texas
  • 12300 Fairway Meadows Drive, Fort Worth, Texas
  • 12333 Fairway Meadows Drive, Fort Worth, Texas
  • 12336 Fairway Meadows Drive, Fort Worth, Texas
  • 12340 Fairway Meadows Drive, Fort Worth, Texas
  • 8812 Greenhaven Drive, Fort Worth, Texas
  • 9400 Harbour View Lane, Fort Worth, Texas
  • 12509 Indian Creek Drive, Fort Worth, Texas
  • 3940 Lakewood Heights Court, Fort Worth, Texas
  • 8644 Overland Drive, Fort Worth, Texas
  • 6100 Troon Road, Fort Worth, Texas
  • 2513 Wabash Avenue, Fort Worth, Texas
  • 8316 Waterfront Court, Fort Worth, Texas
  • 8533 Waterfront Court, Fort Worth, Texas
  • 3933 Westway Terrace, Fort Worth, Texas
  • 12008 Alexandria Drive, Frisco, Texas
  • 4 Englewood Court, Frisco, Texas
  • 1 La Costa Court, Frisco, Texas
  • 2370 Sleepy Hollow Trail, Frisco, Texas
  • 3814 Fairway, Granbury, Texas
  • 1717 Bison Meadows Lane, Heath, Texas
  • 210 Cedar Tree Lane, Heath, Texas
  • 524 Mariah Bay, Heath, Texas
  • 549 Mariah Bay, Heath, Texas
  • 2 Shepards Way, Heath, Texas
  • 900 Shadow Ridge Drive, Highland Village, Texas
  • 3305 Shadow Wood Circle, Highland Village, Texas
  • 801 Tree Haven Court, Highland Village, Texas
  • 17402 Cedar Placid Lane, Houston, Texas
  • 414 North Wilcrest Drive, Houston, Texas
  • 2148 Ravenwood Drive, Keller, Texas
  • 8700 Weston Lane, Lantana, Texas
  • 1873 Tucson Drive, Lewisville, Texas
  • 6004 Pinnacle Circle, Little Elm, Texas
  • 9403 Wayne Avenue, Lubbock, Texas
  • 11114 Autumn Mist Cove, Magnolia, Texas
  • 38122 Wind Song Trace, Magnolia, Texas
  • 6804 Boulder Lake Road, Mckinney, Texas
  • 2121 Brenham Drive, Mckinney, Texas
  • 5904 Cypress Court, Mckinney, Texas
  • 6908 Echo Canyon Drive, Mckinney, Texas
  • 6917 Echo Canyon Drive, Mckinney, Texas
  • 1509 Edgewood Drive, Mckinney, Texas
  • 5806 Edgewood Drive, Mckinney, Texas
  • 1612 Hastings Bluff, Mckinney, Texas
  • 812 Hills Creek Drive, Mckinney, Texas
  • 817 Hills Creek Drive, Mckinney, Texas
  • 822 Hills Creek Drive, Mckinney, Texas
  • 823 Hills Creek Drive, Mckinney, Texas
  • 900 Hills Creek Drive, Mckinney, Texas
  • 909 Hills Creek Drive, Mckinney, Texas
  • 911 Hills Creek Drive, Mckinney, Texas
  • 918 Hills Creek Drive, Mckinney, Texas
  • 931 Hills Creek Drive, Mckinney, Texas
  • 1207 Hills Creek Drive, Mckinney, Texas
  • 12200 Hills Creek Drive, Mckinney, Texas
  • 4905 Jamestown Lane, Mckinney, Texas
  • 7204 Millard Pond, Mckinney, Texas
  • 509 Old Course Circle, Mckinney, Texas
  • 7012 Old York Road, Mckinney, Texas
  • 7019 Old York Road, Mckinney, Texas
  • 7002 Oxford Court, Mckinney, Texas
  • 823 Parkwood Court, Mckinney, Texas
  • 826 Parkwood Court, Mckinney, Texas
  • 2105 Pebblebeach Place, Mckinney, Texas
  • 7111 Round Hill Road, Mckinney, Texas
  • 1208 Saddlebrook Drive, Mckinney, Texas
  • 12528 Saratoga Springs, Mckinney, Texas
  • 1917 Savannah Drive, Mckinney, Texas
  • 2021 Savannah Drive, Mckinney, Texas
  • 1112 Shady Oaks Circle, Mckinney, Texas
  • 5701 Spring Hill Drive, Mckinney, Texas
  • 5917 Spring Hill Drive, Mckinney, Texas
  • 2603 Sunny Meadows, Mckinney, Texas
  • 1991 Sunset Trail, Mckinney, Texas
  • 1603 Timber Edge Drive, Mckinney, Texas
  • 7003 Wellington Point Road, Mckinney, Texas
  • 7103 Wellington Point Road, Mckinney, Texas
  • 7110 Wellington Point Road, Mckinney, Texas
  • 508 Willow Springs Drive, Mckinney, Texas
  • 2012 Winchester Street, Mckinney, Texas
  • 1000 Windsor Creek, Mckinney, Texas
  • 4301 Kingsbury Drive, Plano, Texas
  • 3708 Watercrest Drive, Plano, Texas
  • 403 Hilltop, Roanoke, Texas
  • 930 Parkview Lane, Southlake, Texas
  • 6330 Borg Breakpoint Drive, Spring, Texas
  • 21014 Florette Lane, Spring, Texas
  • 78 Northgate Drive, The Woodlands, Texas
  • 86 Sunlit Grove Street, The Woodlands, Texas
  • 10135 Valley Drive South, Willis, Texas

In announcing the indictment, U.S. Attorney John M. Bales specifically noted the breadth of the financial scheme, “This indictment brings to light a criminal scheme that is quite breathtaking in its scope and beyond disturbing as far as the boldness of the fraud. The agents have done a remarkable job putting together this investigation and we look forward to presenting all of the evidence in court. Hopefully, others involved in mortgage fraud will be taking notice-we will be relentless in discovering, exposing and holding accountable those who have committed similar crimes.”

If convicted, the defendants face up to 20 years in federal prison for the conspiracy charge, up to 20 years in federal prison for each count of mail fraud charge, and up to 10 years in federal prison for each count of money laundering.

“Mortgage fraud creates so much harm to individuals, businesses and our economy, but today’s indictment is a strong reminder how serious our system considers this criminal activity,” said Erick Martinez, Assistant Special Agent in Charge, IRS-Criminal Investigation, Dallas, Texas Field office. “Those who line their pockets with profits from these schemes should know they will not go undetected and will be held accountable.”

“Evidence collected by the FBI to support today’s indictments proves that financial crime conspiracies, particularly mortgage fraud, still threaten our economic stability,” said Robert E. Casey, Jr., Special Agent in Charge of the FBI Office in Dallas. “This investigation illustrates the North Texas law enforcement community’s commitment to root out those who perpetrate mortgage fraud. Although increased prosecutions alone will not solve the mortgage crisis, we hope these prosecutions will help deter future fraud.”

This case is being investigated by the FBI and the Internal Revenue Service and is being prosecuted by Assistant U.S. Attorney Shamoil Shipchandler.

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.

An indictment is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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Allison Tussey

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11 responses to Forty Indicted in Major East Texas Mortgage Fraud Scheme

  1. If we had a US Marshall who would put 2 and 2 together there is a link to all of these scams and crooked Lawyers,Judges,DHS workers using third parties to get real estate to collect on section 8 funds(occupients are illegals)I’m sure some of the DHS workers also get free groceries for their families,government contract truckers(part were some of the motorcycle gangs back in sixties),drug runners(truckers and mexicans who come to walking horse barns,Patrick Swiney case needs examined), crooked cops,all of this started because insurance companies do not want to be honest and pay the person who has a loss that they paid honest money for.They are all crooks with these crooks, and all out rogues.Some of the insurance sales people here even take kick-backs from these losses on house fires,life insurance,and crop losses I think.All of their scam activities follow the solid waste/biowaste/chemical waste dumpers and the Municipal Leagues who went nationwide and/or country wide.All are draining our country’s pocketbook,and no one gives a damn about that pure human fecal matter hauled from the large metropolitan areas and dumped in the rural country where the community thinks folks are peons or they are disabled,widowed or both.(People asking for grants to solve the problem don’t get them because of this controlling group) There is also nuclear waste being done the same way(reason TVA had the ash spill when they were being investigated they dumped in those ash heaps which had to give way with all that radiated cool-down water; as well as those shipments blown up at sea. These rogues never got wealthy enough with that they have to poision the whole country and keep robbing folks.Our elected officials are in on it too here in Tennessee. The farm services offices are the finders of parcels used for dumping that waste.There is a lawyer firm in Arkansaw,Texas,West,Virginia and here in Tennessee that follows that mess;where they make a lot of their money.But now they have reached down to the widow and the fatherless children.Cops may turn their head for a dollar but GOD will put an end to this rogue mess of thieves..The advocate who stole from the nest and not a person peeked will come to light soon.The shopping malls came about by people who had made their monies or a lot of money that had to be laundered.It was whiskey runners years ago back in the Kennedy era.We had a few big stores like Sears, Woolworths,Macy’s,others;then came the newer stores and the medium shopping centers TG&Y;, Big K, K-Mart,Walmart,Peebles,Dillards, others. In the meantime the grocery chains had started also.Kroger,A&P;.IGA,Piggly Wiggly,etc.All our towns had banks and an honest system for the most part then. Now we have a generation of dead-beat,freeloading, crooks. Crooks who are too lazy to work at manuel jobs and gripe because they never saw the person who did work “In the real world”. All the records kept at the court houses should mean what they say.A deed should be the same as it was when it was first surveyed.Then any deed afterwards should show the exact cuts or divisions. Now crooked Judges and lawyers want to allow crooked surveyors to steal even a persons hard-worked for(and paid by manual labor;paid for by both parents working 24/7 day and night)lands bought for their children before my husband died of cancer.All of this done by one county commissioner who needed to make money on his aunt’s farm.Money from the solid waste dumping.First time I ever heard of a man dying and leaving his inheritance to his nephew. Just go out and make up a deed and record somebody else’s land saying it is your grandfathers;when you have lost your lands to bankers years ago that was your grandfathers.Because he’s a “commissioner”(dead now)that makes it so.All he has to do is know the judge.That’s justice in our hick town in Tennessee.He has far reaching connections through his relatives in Missouri,Arkansaw,Florida,Georgia,West Virginia,D.C. and Pennsylvanis;also a relative cop in Memphis and several cops and lawyers in Nashville as well as Judges in Nashville and these other small towns. We are ordinary people who know people from several walks of life and my husband did literally feed the nations at his job on the rivers.You see he was one of those “River rats,” who was a good, honest, God Fearing human being who loved all of his children,all eight of them.These coalitions that sprang up because of the sludge dumping mess are the big scammers here.They were the feeding force behind the houseing market.The building coalition,foresty and lumber coalition,small farmers were being pushed out(you can’t grow cattle or livestock and sell it anymore unless you belong to..) for a few big farmers with a huge scam using the farm services for the pipeline for”RURAL DEVELOPMENT”. They have taken a large strip of land already installed pipes for water and sewage.

  2. The massive Historic mortgage fraud committed on the country was committed when the Obama administraition detected a “non-existent” mortgage industry collapse and stole hunderds of millions of dollars (most of which has yet to be spent on this supposed “crisis”) which stampeeded us from a mild recession
    , into a deep recession. Does anyone really believe that ANY government agency was actually “pro-active” with such an, as yet, completely unverified claim of collapse “avoidence”? What do we call what we currently have, if we supposedly avoided a collapse? If/when proven, this would be High Treason! The local law enforcement that obviously ignored this problem & complaint also needs to be investigated for at least, incompetence. The prosecution & court also need to be carefully monitored all the way along this process, to make sure that there is NO “Witch Hunt” as that seems to be a pattern of the political system, when the attention of the public is not wanted where the problem REALLY exists!!! Those foolish enough to commit crimes in business deserve to be punished, but “we all” need to be sure that justice is complete and gets to the “root of the problem”! There are many levels of “fraud” in our world today and nothing will be corrected until we all get it straight!

  3. Andy – I think we all know how the political scene is working. Afterall – mortgage fraud whistleblowers have been trying for years to get things done. It is always amazing that the field sees and figures out the problems and because it doesn’t fit into the printed system at the moment – it is disregarded.

  4. If any of you think Obama is serious about rooting out financial fraud, ask why there is no investigation of HUD’s missing BILLIONS every year. He is only blowing smoke. The only ones held accountable will be private sector. Government fraud will go unchecked.

  5. First of all thanks to Ms Sapp for having the persistence to lead the way in this arrest. It takes a leader to put the effort in and sometimes do most of the work and then convince law enforcement.. The frontline people see this garbage everyday and it is dissappointing to know that he problem is so widespread. The key to most every mortgage fraud deal is a falsified appraisal – Bob you are right on this but there are so many components and sometimes you don’t see the payoff as shell companies took the proceeds in and made payments so the mortage insurance would kick in when the default took place. WHAT A MESS!! This is a war on the financial stability of our country in my opinion.

  6. I have been happy to see an effort to prosecute fraudsters in the mortgage business but I am concerned about the numbers of people supposedly involved. I find it hard to believe 40 people, mostly women, were all in agreement to a fraud ring. I am afraid many are being duped into services and then end up in jail when there was no actual intent. I read the above indictment and noticed Melton and Mitchell – appraisers – did most of the appraisals but have the least indictments while the women involved seem to be getting the most harsh treatment from the USDJ. I also noticed there is no evidence of pay-offs to most of those indicted so why would so many risk so much for nothing? I hope this is not turning into a witch hunt. If it becomes apparent it is it won’t bode well for any of us in the industry.

  7. I can relate to Nancy and Steve. One thing is for sure…the wheels of justice might turn slowly, but they turn!

  8. I am sure law enforcement is going to stay busy arresting, indicting and prosecuting so many fraudsters. It is sad that so many blew the whistle five years ago and the traction was slow in coming.

    I feel for all the honest, hard working people that are suffering by the declining marketplace caused by so much fraud. AMEN

  9. Barry, interesting but sad comment about Ms. Sapp having to convince the Collin County Authorities to investigate John Berry and his cohorts. It’s a sad state of affairs in Collins County where their cops will write an honest citizen a speeding ticket at a drop of a hat but require months of prodding to act on a multi-million dollar fraud scheme.

  10. Were it not for the efforts of one person, Ms. Jocelyn Sapp those indicted would never have been caught.
    Ms. Sapp spent over two years gathering data on this ring of thieves which was turned over to the FBI, Collin County District Attorney and the State Attorney’s Office.
    It took her and interested neighbors over six months to interest the Collin County District Attorney to investigate and take legal action.
    They were the first Law Enforcement Agency to obtain a conviction of John
    Berry the ring leader.


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