Leader of Crisp & Cole Mortgage Fraud Scheme Sentenced to 17 Years

Allison Tussey —  April 1, 2014 — 1 Comment

David Crisp, 34, San Diego, California, was sentenced United States District Judge Lawrence J. O’Neill to 17 years and 7 months in prison, and Jennifer Crisp, 31, San Diego, was sentenced to five years on probation for charges stemming from their involvement in an extensive mortgage fraud scheme that ran from January 2004 to September 2007.

David Crisp was ordered to pay more than $28 million in restitution to lenders. He was taken into custody after the hearing. Jennifer Crisp was ordered to pay $1,689,952 in restitution.

As previously reported by Mortgage Fraud Blog, David Crisp and Carl Cole, who was sentenced last month to 17 years and seven months in prison, owned and operated Crisp & Cole Real Estate (CCRE), a real estate brokerage, and Tower Lending, an affiliated mortgage brokerage. Between January 2004 and September 2007, these defendants and others at CCRE and Tower Lending carried out a conspiracy to defraud mortgage companies and federally insured financial institutions.

They used straw purchasers to acquire properties at inflated prices with funds borrowed from lenders, often using 100 percent financing and based on false and fraudulent loan applications. The conspirators frequently resold the properties from one straw buyer to another, each time at an inflated, higher price in order to extract the purported increased “equity” from the property for their benefit. Ultimately, most of the properties were foreclosed upon after the defendants failed to make the mortgage payments when due. David Crisp admitted in his plea agreement that he and the co-conspirators caused losses of close to $30 million to the defrauded lenders due to the conspiracy.

According to her plea agreement, Jennifer Crisp acted as a straw buyer for CCRE and purchased several properties by submitting loan applications to lenders containing material misstatements and omissions of material information.

Last week, co-defendant Jayson Peter Costa was sentenced to 78 months in prison due to his participation in the scheme. Sentencing dates for the remaining defendants are as follows: Michael Angelo Munoz on May 5, 2014; Jeriel Salinas on May 12, 2014; and Sneha Mohammadi on June 9, 2014. Robinson Nguyen has completed his 27-month sentence. The trial of the remaining co-defendant is set for April 8, 2014.

Before David Crisp and the other defendants were indicted, five separate cases were brought, in 2009 and 2010, against five defendants who pleaded guilty to charges relating to this scheme. Three are scheduled to be sentenced on June 2, 2014:

Jerald Allen Teixeira (1:09-cr-375 – one count of wire fraud for false statements on loan documents;

Megan Balod (1:10-cr-016 – four counts of wire fraud for acting as a straw buyer);

Christopher Lance Stovall (1:10-cr-271 – four counts of mail fraud for making false statements on loan documents).

Two are scheduled to be sentenced on May 27, 2014:

Kevin Patrick Sluga (1:10-cr-001 – four counts of wire fraud for false verification of employment letters); and

Leslie Sluga (1:10-cr-002 – two counts of wire fraud for acting as a straw buyer).

United States Attorney Benjamin B. Wagner announced the sentences.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Kirk Sherriff, Henry Carbajal III, and Christopher Baker are prosecuting the case.

 

U.S. Attorney Wagner stated, “David Crisp lived in the fast lane, steering a real estate company that was all image and no substance. Today he crashed hard, and the prison sentence he began this afternoon is the final bit of devastation caused by his mortgage fraud scheme.”

“David Crisp rose to real estate millionaire by participating in a massive mortgage fraud scheme that contributed to the real estate bubble that devastated the savings of so many Californians,” said Special Agent in Charge Monica M. Miller of the Federal Bureau of Investigation’s Sacramento division. “He flaunted his ill-gotten wealth with an extravagant lifestyle that included exotic cars, Armani suits, bodyguards and private jets. His sentencing reflects the gravity of his crimes.”

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Allison Tussey

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One response to Leader of Crisp & Cole Mortgage Fraud Scheme Sentenced to 17 Years

  1. Mike Sullivan April 2, 2014 at 3:20 pm

    Who were the appraisers in this? If they did their job correctly this constant inflating could not take place because the value estimates could not be supported.

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