Mortgage Fraud Ringleader Sentenced to 8 Years in Prison

Allison Tussey —  March 2, 2015 — Leave a comment

Susanne Helbig, 50, Roanoke, Virginia, the former majority owner of a construction company who recruited a number of strawbuyers to defraud financial institutions of millions of dollars through an intricate mortgage fraud conspiracy, was sentenced in the United States District Court for the Western District of Virginia in Lynchburg.

The defendant, majority owner of Genesis Mansions, previously pled guilty to one count of mortgage fraud conspiracy and one count of tax fraud. Helbig was sentenced to 96 months in federal prison. The defendant has also agreed to pay $10,582,188 in restitution to the financial institutions that were defrauded and $179,593 to the Internal Revenue Service.

Helbig previously admitted that between March 2006 and December 2007 she, and others, conspired to defraud financial institutions through the submission of false and fraudulent mortgage loan applications and settlement statements in the name of strawbuyers. Helbig, and others, took these actions to induce financial institutions to finance the purchase and construction of approximately 30 properties near Smith Mountain Lake. The fraudulent actions of Helbig, and others, caused nearly $11 million in losses.

According to evidence presented at previous hearings by Assistant United States Attorney Laura Day Rottenborn, Helbig was the leader of a conspiracy who, along with her co-conspirators, recruited strawbuyers to pose as purchasers for properties Helbig owned near Smith Mountain Lake. Helbig paid the strawbuyers between $5,000 and $20,000 to pretend that they had purchased property from Helbig and needed a loan to build a primary residence on the land. In reality, however, the strawbuyers had no intention of owning or living in the house and instead Helbig took the loan disbursements for herself. She used some of the money to build homes on the land, which she intended to flip and sell for substantial profit but never did. She also used the loan money to pay herself; gave some of the money to her coconspirators to incentivize their participation in the scheme; and took money from one loan institution to pay off debts she owed to other financial institutions.

To induce lenders to make the loans, Helbig and her co-conspirators helped the strawbuyers falsify their loan applications. The loan applications stated an artificially inflated value for the land, inflated the strawbuyer’s income and assets, misrepresented the strawbuyer’s employment, misrepresented that the property would be the strawbuyer’s primary residence, and misrepresented the true source of funds provided to the strawbuyer for closing.

Helbig personally gave strawbuyers substantial sums of money to help them qualify for loans that they could not otherwise afford, as well as kickbacks to the strawbuyers for their services– without disclosing either such gifts to the lenders. In many instances, Helbig then took back the “gifts” used to inflate the strawbuyer’s assets as soon as the loan closed. Helbig further signed settlement statements and loan applications even though she knew they contained materially false information designed to trick the banks into making the substantial loans. She then filed false tax returns claiming improper deductions, resulting in a grossly underestimated tax liability.

When Helbig could no longer obtain additional financing, due in part to her supply of strawbuyers drying up and the tightening of the extension of credit in connection with the mortgage crisis of 2008, she stopped making payments on the loans, causing the properties to go into foreclosure and causing the lenders substantial loss. The strawbuyers were also put into financial ruin when the defaults and foreclosures were reported negatively on their accounts with the credit bureaus.

The investigation of the case was conducted by the Internal Revenue Service-Criminal Investigations, the Federal Bureau of Investigation and the United States Postal Inspection Service.

Assistant United States Attorneys Laura Day Rottenborn and Heather Carlton prosecuted the case for the United States.

“These individuals executed a complex scheme that defrauded a number of local and national financial institutions,” Acting United States Attorney Anthony P. Giorno said today. “Ms. Helbig’s repeated acts of fraud and making false statements to banks allowed her to fraudulently obtain about $17 million in loans, the majority of which was lost. We continue to be committed to prosecuting those who commit mortgage and other financial frauds as a way of protecting our housing and credit markets.”

“The FBI is committed to investigating those who scheme to personally profit by defrauding the nation’s mortgage industry. The FBI and our law enforcement partners conduct these investigations to minimize the impact on the honest borrower who  oftentimes has to absorb the costs of these illegal activities, and we will use every tool in our investigative toolbox to ensure solid financial markets for lenders and borrowers alike,” said Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Division.

“Helbig’s reckless conduct, and others like her, contributed to the financial crisis in 2008. Her greed and self-serving actions caused serious harm to financial institutions and U.S. taxpayers,” said Thomas J. Kelly, Special Agent in Charge, IRS Criminal Investigation, Washington DC Field Office. “IRS Criminal Investigation, together with our law enforcement partners, will continue to pursue those who engage in criminal actions that damage the integrity of our financial system.”

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Allison Tussey

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