Terrence Matthew Brown, also known as Terry Brown, 49, Round Rock, Texas, was sentenced in federal court for his role in a $2.7 million mortgage fraud scheme. The scheme involved Brown buying homes at inflated prices, obtaining mortgage loans by fraud at the inflated amounts, and receiving kickbacks from the excess loan proceeds without the lenders’ knowledge.
The defendant, formerly of Wichita, Kansas, was sentenced by U.S. District Judge Brian C. Wimes to seven years and three months in federal prison without parole. The court also ordered Brown to pay $1,201,635 in restitution.
On May 2, 2013, Brown was found guilty of conspiracy to commit wire fraud and five counts of wire fraud.
Brown participated in a mortgage fraud conspiracy in 2006 in which mortgage lenders were defrauded in 10 separate loans for five properties, which were obtained by false statements in loan applications and other documents. Mortgage loans totaling $2.7 million were approved to purchase properties in Greenwood, Mo., Kansas City, Mo., Overland Park, Kan., and Leawood, Kan., all within a period of three months.
The scheme involved Brown buying homes at inflated prices, obtaining mortgage loans by fraud at the inflated amounts, and receiving kickbacks from the excess loan proceeds without the lenders’ knowledge. In order to qualify for the loans, Brown lied to lenders about his income, his employment, his assets and liabilities, his intent to occupy the properties and other matters.
Brown and co-conspirators structured the home purchases in such a way that Brown would receive money from the loan proceeds without the knowledge or consent of the lenders. Brown received more than $200,000 in illegal kickbacks. In order to receive the kickbacks without the lenders finding out, Brown submitted false invoices to the title companies closing the loans. The invoices were in the names of businesses that claimed to be entitled to payment for services supposedly rendered.
All the loans went into default and the properties were foreclosed.
According to court documents, Brown would not have qualified financially for the loans if he had been truthful, as his income would not have supported the loans.
Brown failed to live in any of the five properties as his primary residence. Brown was a sex offender required to register where he lived; he reported to law enforcement that he lived in two of the properties for brief periods, but he failed to make any of them his primary residence for a year as required by the mortgages. He also made only $28,778 in total mortgage payments – barely more than one month of combined payments on the loans – before he defaulted on each of the loans.
Tammy Dickinson, United States Attorney for the Western District of Missouri, announced the sentence.
This case was prosecuted by Assistant U.S. Attorney Linda Parker Marshall. It was investigated by the FBI.