Loan Originator Admits Down Payment Fraud Scheme

Allison Tussey —  November 6, 2013 — Leave a comment

John Carlisle, 49, New Haven, Indiana, pled guilty before Magistrate Judge Christopher A. Nuechterlein to the felony offense of making false statements and reports regarding mortgage loans and aiding and abetting in such conduct.

According to the plea agreementfrom 2008 through 2010, Carlisle was a licensed loan originator in Fort Wayne, Indiana. Ryan Webb in conjunction with Johnny Stine and others purchased low-end homes in the Fort Wayne area, often using an entity called Sunset Properties of NI, LLC. Through the use of advertising and a website, Webb and Stine attracted buyers for these properties. Webb and Stine would then flip or sell these low-end homes to these buyers, most often for a sales price of two or three times what had been paid for the homes. Oftentimes, the purchasers of the homes were of very modest financial means and could not on their own qualify for the needed mortgage loan.

As part of a fraud scheme, Webb and Stine provided monies to the home buyers/borrowers to cover loan closing costs and to give the appearance that the buyers had assets in reserve. To hide the fact that all of the monies for closing and reserves had come from Webb/Stine (monies that were supposed to come from the buyers/borrowers or persons who were relatives of them but in fact came from the seller/real estate broker), Webb and Stine with the knowledge and help of Carlisle prepared phony gift letters documenting falsely that the monies Webb and Stine provided had come from family or relatives of the buyers/borrowers.

These sham gift letters with false representations violated applicable HUD/FHA mortgage insurance regulations and in fact deceived HUD/FHA. Because these buyers/borrowers could not on their own qualify for the mortgage loans, they frequently defaulted soon after getting the mortgage loans and the homes went into foreclosure, which caused substantial losses to the mortgage lenders and mortgage insurance provider HUD/FHA.

Carlisle also admitted to the indictment’s forfeiture allegation. Magistrate Nuechterlein is recommending that the district court accept the tendered guilty plea. Parties have 10 days in which to object to the magistrate judge’s recommendation. This charge was filed as a result of an investigation by the Federal Bureau of Investigation. Sentencing has been set for 12/6/2013 before Judge Jon E. DeGuilio. This case is being prosecuted by Assistant United States Attorney Donald Schmid.

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Allison Tussey

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