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Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of Smith Dollar, PC, is licensed to practice law in California and maintains offices in Santa Rosa, California. Email Ms. Dollar
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Missouri Man Sentenced in Major Mortgage Fraud Scheme
Russell Todd McBride, Creve Coeur, Missouri, was sentenced on a mortgage fraud scheme involving the sale of residential real estate located in Sikeston, Missouri. McBridewas sentenced to 135 months on a 34-count indictment for his involvement in the scheme.
As previously reported on Mortgage Fraud Blog, McBride was an operator of Century Mortgage and Finance, Inc., which was in the business of providing mortgage-related services, and had offices located in Sikeston, Cape Girardeau, St. Louis Countyand elsewhere. As a mortgage broker, Century Mortgage would locate and obtain prospective mortgage lenders for prospective borrowers. Employees and others associated with Century Mortgagewould prepare mortgage applications and supporting documents for borrowers. Then, for a fee, Century Mortgagewould find a mortgage lender to make the loan. Robert Wrolstad worked with McBrideand for Century Mortgageproviding services, including assisting in closing real estate transactions and working with title companies.
The scheme, which occurred from at least July 2005 and continued through November 28, 2006, involved investors recruited by McBride and Wrolstad purchasing real estate primarily located in Sikeston, Missouri. The owners of the real estate would sell the properties at or near fair market value to investors recruited by and known to McBride and Wrolstad. However, the investors paid prices significantly greater than the actual selling price received by the sellers for the properties. The investors would purchase the property at a fraudulent and overvalued price by obtaining loans to purchase the property. As part of the scheme, McBride and Wrolstad obtained appraisals, which significantly overvalued the properties, which enabled them to personally obtain inflated loan proceeds despite having no interest in the conveyed real estate.
McBride represented to investors that the residential real estate properties were good investment properties, that the rents would pay the mortgage, that the properties could be acquired with "no money down" and that the properties could be sold, sometimes in approximately a year, at a profit. As part of the scheme, McBride and Wrolstad also paid monies to investors as an inducement for them to purchase residential real estate funded by loans brokered through Century Mortgage. For example, in one case a purchaser paid $66,000 for a property that the seller sold for $7,500. In another real estate transactions, the purchaser paid $54,000 for property that the seller sold for $15,000.
In many cases, purchasers of real estate secured by loans brokered by Century Mortgagedid not provide closing costs or down payments to acquire the real estate. McBride and Wrolstad, and others acting on their behalf, provided the investors with the funds for the down payment and closing costs. McBride and Wrolstad also caused mortgage loan companies to send the loan proceeds by wire transfers in interstate commerce, and caused warranty deeds, deeds of trusts and other closing documents to be sent from the offices of the closing agents by commercial interstate carrier to the lenders and the Recorder of Deeds in Scott County, Missouri.
McBride and Wrolstad directed purchasers and closing agents to pay McBride and Wrolstad substantial sums of the mortgage loan proceeds by checks or wire transfers into their personal bank accounts or other bank accounts controlled by them.
There were approximately 341 other transactions involving the sale of residential real estate located in the Eastern District of Missouri during the past six years, in which McBride and Wrolstad fraudulently obtained mortgage loan proceeds causing losses to lenders and purchases of between $7 million and $20 million. McBride was ordered to pay restitution exceeding $9 million to the lenders and investors defrauded and victimized by the mortgage fraud scheme.
McBride was sentenced on one count of conspiracy to commit wire fraud and mail fraud, 12 counts of wire fraud and 12 counts of mail fraud. In addition, McBride was sentenced on 6 counts of money laundering. After sentencing, the district court remanded McBride to the custody of the United States Marshals to commence serving his sentence.
Acting United States Attorney Michael W. Reap announced today. After sentencing, the district court remanded McBride to the custody of the United States Marshals to commence serving his sentence.
Reap praised the Postal Inspection Service, Federal Bureau of Investigation, the Internal Revenue Service and Assistant United States Attorney Paul W. Hahn, who handled the prosecution for the Government.
Just read an instance of fraud on the kansas city side of the state so it seems this type of activity occurs everywhere.
Posted by on 11/17 at 04:02 AM
Does this seem ludicrous to anybody but me? I me, seriously, in 2005 or 2006 a lender actually closed on a property with a true value of $7,500 but purportedly worth $66,000? And the investor/purchaser thought it could be sold at a profit in a year? Did the purchaser never see the property? Did the lender not check the tax valuation or ever hear of Automated Valuation Modules?
Good grief - if this story is accurate, the perp should go to jail, but SOMEBODY involved in the transaction should have done some due diligence.
Failed Mortgage Firm Trustee Allowed $50,000 in Fees Union Leader
U.S. Bankruptcy Court Judge J. Michael Deasy will approve $50,000 in legal fees for the trustee of failed mortgage brokerage businesses Financial Resources Mortgage Inc. and CL&M Inc.
Bend Oregon Event to Help Homeowners Prevent Foreclosures Oregon.Gov
As part of an ongoing effort to help homeowners avoid foreclosure, state agencies are organizing a foreclosure-prevention event in Bend on Saturday, March 27, 2010.
Shelbyville Man Gets 2-Year Sentence For Loan Fraud Chattanoogan.Com
Prosecutor Gary Humble said the lost was approximately $2.3 million in the mortgage fraud involving hundreds of homes in the Shelbyville area.
Lend America, VP Ashley Banned from FHA Housing Wire
Michael Ashley, the embattled former vice president of Federal Housing Administration (FHA)-backed mortgage originator Lend America, and the company he worked for, were permanently banned from doing business in the industry last week.
Countrywide Tries to Pin Blame on Insurer Court House News
Countrywide Home Loans demands $111 million from Triad Guaranty Insurance, claiming Triad is trying to blame mortgage lenders for the insurer's role in the housing bubble and collapse.
Investors Say They Were Swindled in Property Scheme Fox 13 Now
Utah Division of Consumer Protection is joining forces with a few investors who claim they have been cheated by an agency called "Utah Mini Ranches.
Greenfield Man Accused of Housing Scam The Republic
A former real estate agent conned at least eight people by renting them properties actually owned by a federal agency and then running off with their deposits, prosecutors said.
Appraisal Institute Opposes Obama Administration's Plan for Homeowner 'Short Sales' PR News Wire
Citing concerns about increased mortgage fraud, four organizations representing more than 35,000 real estate appraisers today voiced their opposition to changes to an Obama administration program that will encourage "short sales" of homes.
Ownership Rights to Get Another Look TBO.Com
State lawmakers may beef up protections of property owners' rights by rewriting a law this spring that is at the center of a case of alleged fraud in Pasco County.
Thursday, February 18, 2010 F. Jeffrey Miller Trial Continued Testimony
As reported by Anne Mitchell, who viewed the trial:
Angela Parenza worked for Jeff Miller as the office manager for 7 or 8 years beginning in 1998. Parenza was indicted along with Miller and pled guilty to conspiracy to commit bank fraud and money laundering. Parenza testified that Miller or his contractors allegedly preferred to build all the...
Wednesday, February 10, 2010 F. Jeffrey Miller Trial Coverage Continued - Witness Testimony
Steve Middleton Testimony - Coverage Provided by Anne Mitchell
The Government continued in its cross examination of Steve Middleton. He was shown several HUD-1 statements involving sales of homes located in Overland Park, KS, and Olathe, KS. The HUD statements each allegedly showed line items of payments to (James) Moser & Associates, LLC's...
Monday, February 01, 2010 F. Jeffrey Miller Trial Coverage - Continued Witness Examination
According to Anne Mitchell, who is present in court for the trial:
Next Witness: Kelly Sanford
Kelly Sanford of the Federal Reserve was a short witness for the Government. Sanford manages electronic payments between banks and member financial institutions. He was shown copies of wire transfers and asked whether they coincided with the counts in...
Wednesday, January 27, 2010 F. Jeffrey Miller Trial - Prosecution Witnesses Continued
According to Anne Mitchell, who is viewing the trial:
January 13, 2010
Witness: Rick Hayes
Rick Hayes testified that on the day that he closed on his Miller Enterprise home, he received a phone call from the Kansas Banking Commission informing him that his loan was fraudulent. After the Hayes responded to a classified ad, they met with John...
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The information and notices contained on Mortgage Fraud Blog are intended to summarize recent developments in mortgage fraud cases and mortgage banking matters nationwide. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about mortgage banking, mortgage fraud matters or who believe they require legal counsel should seek the advice of an attorney. The creators, editors and sponsors of Mortgage Fraud Blog do not intend to create a confidential relationship or an attorney-client relationship by communication via or arising from this site.
Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
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