Loan Broker Sentenced for Mortgage Fraud

admin —  September 19, 2012 — 2 Comments

Bryan Knight, 43, Osceola, Indiana, was sentenced to 37 months imprisonment, 2 years of supervised release and restitution of $514,198.00 after pleading guilty to the felony offense of conspiracy to commit bank fraud, mail fraud and wire fraud.

According to the Sentencing Memorandum filed by the government in this case, Knight participated in a mortgage fraud scheme and conspiracy. During this time period, Knight was a loan broker employed at 1st Midwest Mortgage.   As previously reported on Mortgage Fraud Blog, from 2004 through 2007, Robert Culp purchased a large number of properties in the South Bend, Indiana area. Culp then flipped a large percentage of these properties to other persons. Knight worked with Robert Culp in 2005 through 2007 to prepare loan applications and related documentation for a series of mortgage loans for persons who bought properties from Robert Culp in the South Bend, Indiana area. It was Knight’s routine practice to inflate figures on the loan applications in order to get them through the underwriting departments of the mortgage lenders. Knight prepared and then signed the mortgage loan applications that contained false statements and representations regarding the amount of assets and income that the borrowers had in order to show the lenders that the buyers/borrowers had sufficient funds to pay closings and make mortgage payment when in fact they did not. Knight would receive “kickback” payments from co-conspirators for his help in executing the mortgage fraud scheme.

This case was the result of an investigation by the Federal Bureau of Investigation. This case was prosecuted by Assistant United States Attorney Donald Schmid.

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2 responses to Loan Broker Sentenced for Mortgage Fraud

  1. Adriana Camacho December 3, 2012 at 5:33 pm

    I agree, the processors and underwriters had to have known.. These loan must have been stated income and stated assets

  2. It is difficult to understand how all of these loan applications with inflated could through loan processors and underwriters without co-conspiracy on the part of these departments. Assets and incomes would have to have been verified for loans to proceed to closing and be funded.

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