Husband and Wife Plead Guilty to Short Sale Fraud

Allison Tussey —  November 27, 2013 — Leave a comment

Cynthia Hosbrook, 41, and Robert Hosbrook, 52, both of Henderson, Nevada, a husband and wife who worked as real estate agents in southern Nevada, have pleaded guilty to bank fraud charges in connection with several residential short sale transactions that resulted in over $350,000 in losses to Wells Fargo and Freddie Mac.

The defendants pleaded guilty before U.S. District Judge Jennifer A. Dorsey to one count of bank fraud. They face up 30 years in prison and a fine of up to $1 million, as well as mandatory restitution. Sentencing for both defendants is scheduled for March 3, 2014, at 10:00 a.m.

According to their guilty plea agreements (Cynthia, Robert), Cynthia Hosbrook had been an active real estate salesperson in Nevada since April 17, 2000, and Robert Hosbrook was licensed as a real estate salesperson in Nevada from Oct. 20, 2009, to Oct. 31, 2010. In 2010, the Hosbrooks engaged in a short-sale fraud scheme involving the sale of their personal residence to Cynthia Hosbrook’s mother. The Hosbrook’s defrauded Wells Fargo Bank and the Federal Home Loan Mortgage Corporation by falsely representing that the short sale was due to personal hardship, that the transaction was an arm’s length transaction, that the sellers and buyers were not family members, and that the seller would not remain in the property subsequent to the sale.

In fact, the Hosbrooks made a cash sale of the residence to Cynthia Hosbrook’s mother, and then continued to reside in the home after the sale even though they were not suffering from a personal hardship. The scheme resulted in a loss to Wells Fargo Bank and Freddie Mac of approximately $173,559. The Hosbrooks were also involved in two other fraudulent short-sale fraud transactions involving homes in Las Vegas and North Las Vegas, Nevada, during 2008 and 2009.

Daniel G. Bogden, United States Attorney for the District of Nevada, announced the guilty pleas.

The case was investigated by the Federal Housing Finance Agency Office of the Inspector General, and is being prosecuted by Assistant U.S. Attorney J. Gregory Damm.

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Allison Tussey

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