Kurt Fordham, 39, Ft. Washington, Maryland, has been senteced to 10 years in prison, followed by five years of supervised release for conspiracy to commit mail and wire fraud in connection with a mortgage fraud scheme that falsely promised to help homeowners facing foreclosure keep their homes and repair their damaged credit. Fordham was also ordered to pay restitution of $13,131,287.63, and forfeit three residential properties in Oxon Hill, Capitol Heights and Laurel, Maryland, and three vehicles.
According to his plea agreement, and as previously reported on Mortgage Fraud Blog, Kurt Fordham was the president of Fordham & Fordham Investment Group, Ltd. (F&F) and a director of F&F and Burroughs & Smythe Financial Services, Inc. (B&S). In May 2005, Joy Jackson, Kurt Fordham’s wife, and coconspirator Jennifer McCall incorporated Metropolitan Money Store, located in Lanham, Maryland, which offered foreclosure consultation and credit services to financially distressed homeowners. Also at that time, Fordham, Jackson, McCall and other coconspirators incorporated F&F and B&S, based in Lanham and Greenbelt, Maryland to assist Metropolitan Money Store in its foreclosure consulting and credit servicing business.
From September 2004 to June 2007, Fordham, Jackson, McCall and others conspired to fraudulently promise to help homeowners, who had substantial equity in their homes but were facing foreclosure because of their inability to make monthly mortgage payments, avoid foreclosure and repair their damaged credit. The homeowners were directed to allow title to their homes to be put in the names of third party purchasers (the straw buyers) for a year, during which time Metropolitan Money Store promised to improve the homeowners’ credit ratings, help them obtain more favorable mortgages, and eventually return title to their homes to them. The homeowners were told that the equity withdrawn from the properties would be used to pay the mortgage and expenses on their homes and to repair their credit. The straw buyers were paid up to $10,000 to participate in the scheme and allow the properties to be put in their names.
Using the homeowners’ properties, the conspirators applied for mortgages to extract the maximum available equity from the homes, and prepared and submitted fraudulent loan applications to mortgage lenders to obtain inflated loans on the target properties in the straw buyers’ names. At settlements, the conspirators imposed numerous fees and required “seller contributions” which were far in excess of industry standards; they imposed fees for services which were not performed, disclosed or explained to the homeowners; and they transferred the sale proceeds out of the escrow accounts into the conspirators’ business and personal bank accounts and converted a substantial portion of those funds to their personal use.
In order to carry out the fraud scheme, Fordham and others obtained large cashier’s checks in the names of straw buyers and Metropolitan Money Store employees in order to conceal transactions from the lenders. Jackson misappropriated the license and bond numbers of other brokerage and credit repair companies and used them to broker loans and fraudulently improve homeowners’ credit scores by adding fictitious lines of credit to their credit histories.
In addition to directing straw buyers to participate in the scheme and facilitate the submission of false settlement documents, Kurt Fordham personally served as the straw buyer on at least six properties, completing mortgage loan applications which falsely stated, among other things, his income, that the home would be his primary residence and that he would be making the mortgage payments.
During the conspiracy, Fordham and Jackson paid bank employees to provide false income balances for straw buyers to lenders; add straw buyers and others onto accounts for lender verification purposes; transfer money into accounts to show a certain amount of money was in a bank account and thereafter return those funds to the original account; and shift money between Metropolitan Money Store and F&F accounts to facilitate loans in straw buyer’s names.
Finally, Fordham and Jackson directed others to transfer the equity proceeds of homeowners into the general checking accounts of Metropolitan Money Store, B&S, and F&F, as well as Jackson’s personal accounts. Fordham, Jackson and others withdrew these funds and paid for goods and services for themselves, including art, cars, clothing, credit card bills, homes, fur coats, furniture, airline trips, gambling expenses, jewelry, limousine services, student tuition and a luxury wedding for Jackson and Fordham.
As a result of this scheme, the total loss attributable to Fordham, including the estimated losses to the mortgage lenders, is $13,554,012.40.
Nine other defendants have pleaded guilty to the conspiracy and are facing a maximum sentence of 30 years in prison: Joy Jackson, 41, President of Metropolitan Money Store, and Jennifer McCall, 47, both of Ft. Washington, Maryland, a chief executive officer of Metropolitan Money Store and owner of JC and JC Investments LLC; Katisha Fordham, 35, Washington, D.C., a loan processor at the Metropolitan Money Store; Richard Allison, 37, Camp Springs, Maryland, an attorney and employee of the U.S. Census Bureau; Clifford McCall, 47, of Lanham, Maryland, president of Burroughs & Smythe Financial Services, Inc., based in Lanham and a director of the Fordham & Fordham Investment Group, Ltd., a foreclosure consulting and credit servicing business based in Lanham and Greenbelt, Maryland; Carlisha Dixon, 31, Hyattsville, Maryland, vice president and a director of Burroughs & Smythe Financial Services, Inc.; Chandra Jones, 31, Lanham, Maryland, the daughter of co-defendants Jennifer and Clifford McCall; Ronald Aaron Chapman, Jr., 34, Washington, D.C., a loan officer at Metropolitan Money Store; and Wilbur Ballesteros, 33, Lanham, Maryland, a licensed real estate agent, and closing agent on more than 60 straw buyer properties.
United States Attorney for the District of Maryland Rod J. Rosenstein announced the sentence.
“All financial crimes add to the underground economy, erode the integrity of our tax system and threaten the financial health of our communities,” stated C. Andre’ Martin, Internal Revenue Service-Criminal Investigation Special Agent in Charge. “The IRS-Criminal Investigation is united with the rest of the law enforcement community in our resolve to financially disrupt those that commit such crimes against our society and economy.“
United States Attorney Rod J. Rosenstein thanked the Federal Bureau of Investigation, U.S. Secret Service, Internal Revenue Service – Criminal Investigation and the Maryland Department of Labor, Licensing and Regulation’s Division of Financial Regulation Investigative Unit for their investigative work. Mr. Rosenstein commended Assistant United States Attorneys James A. Crowell IV and Christen Sproule, who prosecuted the case.