Man Charged in Scam Involving 37 Straw Buyers

Allison Tussey —  June 7, 2012 — 1 Comment

Jack R. Coppenger, Jr., 49, Akron, Ohio, is the subject of a two-count criminal information charging him for his roles in a mortgage fraud scheme that resulted in losses of approximately $36 million.

More than 40 people have been charged for their roles in the mortgage fraud schemes.

Coppenger was charged with one count of conspiracy to commit bank fraud and to make false statements to influence a bank to make a loan in connection with a mortgage fraud scheme involving property in Florida. In the second count, Coppenger is charged with conspiracy to defraud the United States by impairing and impeding the ability of the I.R.S to assess Coppenger‘s taxes in 2006 by concealing funds Coppenger received from a land “flip” conducted by Andrew Norman and Jason Herceg (previously charged), as detailed below.

Count one of the information charges that Coppenger, along with mortgage brokers Norman and Herceg, who were operating under the name of V.P. Equity LLC., and a co-conspirator known as I.O. (not charged) in procuring “straw buyers” and submitting false loan documents to banks to purchase Coppenger’s lots in Florida (which had already been inflated in value as part of a land flip) in a mortgage fraud scheme.

According to the information, Coppenger, with assistance from Herceg and Norman, perpetrated a large mortgage fraud scheme involving numerous straw buyers primarily from the Akron, Hartville, and Mentor Ohio area. These straw buyers essentially sold their good credit scores to Coppenger in order for Coppenger to secure loans, through straw buyers’ names, for properties in Florida.

Coppenger promised the straw buyers that if they signed the loan application and paperwork, Coppenger would pay them an inducement amount. Coppenger then promised the straw buyers that he would make all the mortgage payments for the property and would make any down payments that were necessary, and that, once the property was developed and sold, they would split the profits equally. On the face of it, the straw buyers would receive money up front from Coppenger, make no payments out of pocket and receive 50 percent of the profit from the sale of the property at the tail end of the transaction.

Herceg and Norman were mentored by Coppenger in the recruitment and use of straw buyers. They assisted Coppenger by using their brokerage company, V.P. Equity, located in the Stow, Ohio, area to prepare and submit falsified loan documents to various banks, which fraudulently inflated the income and assets of the straw buyers in order to qualify them for these loans. Ultimately, Coppenger failed to make the mortgage payments on these loans, resulting in a loss of approximately $36 million, according to the information.

Herceg and Norman, have been charged in separately filed informations of conspiring to defraud two elderly purchasers by selling them a piece of Florida property for $7 million. Moments before this sale, Herceg and Norman, bought the property, through their partnership, 104 Investments, from the original seller and inflated its value by approximately $2.6 million. Herceg and Norman then sold this property to these elderly purchasers, who were told that they were buying the property from the original seller. The elderly purchasers were never told of the last minute “flip”, or that they were actually buying the land from Herceg, Norman, and 104 Investments.

Herceg and Norman, and their 104 Investments business partner, Robert Jason Workman, received approximately $2.6 million from this sale which they then funneled portions of the proceeds out to themselves which included a $690,000 to Coppenger as payment for locating the property. Subsequently, Norman, Herceg, and Workman fraudulently deducted the money they gave to Coppenger as a business expense, according to the information.

Coppenger is also charged in count two of the information with conspiring with his business partner, Kathleen A. Fada-Murray, to defraud the United States by concealing from the I.R.S. their receipt of monies from the fraudulent land flip. Fada-Murray was not involved in the fraud against the elderly purchasers but was owed a return on her investment in Coppenger‘s company, SMB&A. Once Fada-Murray became aware that Coppenger had received $690,000.00 as a result of the fraud in count one, she took steps to obtain some of this money herself and conspired with Coppenger to conceal their receipt of these funds from the I.R.S. by transferring funds into and out of accounts with corporate names, and out of an account in the name of Coppenger and his wife, characterizing these funds as a repayment of a loan, and using these funds to pay for Fada-Murray‘s personal expenses, including online gambling debts, credit card payments, car payments, and federal and state taxes, as well as for personal expenses of Coppenger, including carpeting, car payments, and the payment of business expenses to keep the mortgage fraud scheme going, according to the information.

Norman‘s and Herceg‘s business partner, Workman, has also been previously charged with filing a false individual tax return for 2006 for underreporting his portion of the $690,000 received by the 104 Investments partnership, which was used to then pay Coppenger, because he took a fraudulent business deduction for his share (1/3) of these proceeds. At the time Workman received the proceeds from this transaction in 2006, he was not charged with being involved in the fraudulent scheme to defraud the elderly purchasers.

However, by the time he had filed his 2006 tax return in 2007, Workman was aware that funds paid out to Coppenger were not business expenses. Workman‘s case, as well as the cases against Norman and Herceg, have been assigned to the Honorable John Adams, U.S. District Court for the Northern District of Ohio, in Akron, Ohio, and are pending sentencing.

A series of straw buyers have also been charged with a one-count information charging Conspiracy to Commit Loan Fraud and Bank Fraud. A total of 37 straw buyers have been charged to date with fraudulently securing a total of 45 individual mortgage loans which went into default and resulted in losses to financial institutions ranging from $267,013 to $1,301,958 per mortgage loan. These straw buyers were either charged, plead guilty or are pending sentencing before the Honorable Judge Adams:

Robert J. Rosenstein, Plead Guilty on 12/28/10;

Lauren May, Plead Guilty on 1/31/11;

Stanley Beekma, Plead Guilty on 4/6/11;

David Yamokoski, Plead Guilty on 4/7/11;

Robert W. Aikens, Plead Guilty on 6/8/11;

Thomas D. Duke, Plead Guilty on 6/8/11;

David G. Cannon, Plead Guilty on 9/9/11;

William T. Zamski, Plead Guilty on 9/9/11;

Charles Rankin, Plead Guilty on 8/12/11;

Charles Eppinger, Plead Guilty on 8/31/11;

Delores Matthews-Campbell, Plead Guilty on 9/9/11;

Randall R. Coblentz, Plead Guilty on 11/3/11;

Leon M. Coblentz, Plead Guilty on 10/11/11;

Thomas J. Bell, Plead Guilty on 11/3/11;

Michael C. Testa, Plead Guilty on 12/19/11;

John P. Schlabach, Plead Guilty on 12/9/11;

Matthew S. Yoder, Plead Guilty on 11/3/11;

D. Brian Bontrager, Plead Guilty on 11/3/11;

John Schlabach, Plead Guilty on 5/17/12;

Paul D. Schrock, Plead Guilty on 5/17/12;

Kevin Hunt, Plead Guilty on 12/20/11;

Gerald Nelson, Plead Guilty on 1/20/12;

Jay A. Tyree, Plead Guilty on 3/8/12;

Todd B. Miller, Plead Guilty on 5/17/12;

Timothy W. Eastgate, Plead Guilty on 3/15/12;

John G. Bontrager, Plead Guilty on 5/17/12;

M. Blaine Miller, Plead Guilty on 5/18/12;

Anthony Rockich, Plead Guilty on 4/5/12;

Michael H. Mokler, Plead Guilty on 5/18/12;

Gerald A. Williams, Plead Guilty on 5/18/12;

Christopher A. Pursley, Plead Guilty on 5/18/12;

David E. Cordi, Plead Guilty on 4/4/12;

Brian P. Eger, Plead Guilty on 5/17/12;

Todd B. Haydocy, Plead Guilty on 4/4/12;

Albert A. Susinkas, Plead Guilty on 5/18/12;

Curtis L. Coblentz, Plead Guilty on 5/21/12;

Andrew D. Norman, Plead Guilty to conspiracy to commit mortgage fraud; conspiracy to commit wire fraud; filing false tax returns 6/22/11;

Jason Herceg, Plead Guilty to conspiracy to commit mortgage fraud; conspiracy to commit wire fraud; filing false tax returns, 9/15/11;

Robert Jason Workman, Plead Guilty to filing a false tax return, 5/26/11;

Kathleen A. Fada-Murray, Plead Guilty to conspiracy to defraud the IRS, 9/9/11; and

William Murray, Plead Guilty to conspiracy to defraud the IRS; conspiracy to commit mortgage fraud, 9/9/11, Sentenced to two years in prison, 5/23/12.

An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt. If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, announced the charges.

The case is being prosecuted by Assistant U.S. Attorneys Christian H. Stickan and Henry F. DeBaggis, following investigation by agents of the IRS-CI and FBI, Akron Office.

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One response to Man Charged in Scam Involving 37 Straw Buyers

  1. Unbelievable!!! The magnitude of mortgage fraud continues to astound me. And none of it would be possible without the banks’ encouragement

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