Knab Mortgage Principals and Straw Buyers Face Charges
A Franklin County, Ohio Grand Jury has indicted four Ohio residents for their roles in a complex scheme to defraud mortgage lenders by obtaining high-dollar loans for the purchase of depressed properties.
Those indicted were:
Corey M. Hazel, 44, mortgage broker, Columbus, Ohio
Clemel Ronald Randall, 35, mortgage broker, Columbus, Ohio
Marlene Crystal Hansard, 31, straw buyer, Columbus, Ohio
Bobby Lewis Mays Jr., 28, straw buyer, Columbus, Ohio
Operating as Knab Mortgage, a licensed mortgage broker, Hazel and Randall allegedly submitted forged earnings and bank statements along with false loan applications and property appraisals to secure grossly inflated loans on 30 properties throughout Franklin and Fairfield counties in Ohio between March 2002 and September of 2005. During the course of a nine-month probe, investigators determined that the duo pocketed more than $2 million as a result of this scheme.
“In one case, the perpetrators submitted a $310,000 appraisal for a vacant lot with a market value of $2,500,” Ohio Attorney General Jim Petro said. “They were able to set up a bogus sale of the house for $299,000 to a so-called â€˜straw buyer’ who they recruited to participate in the fraud. As a result, they fraudulently obtained more than $200,000 from a lending institution for the sham transaction.”
The Grand Jury indicted Hazel, who allegedly coordinated the scheme, on 45 felony counts and Randall, his partner, on 28 felony counts. Alleged straw buyers Hansard and Mays face 18 and 26 felony counts respectively. Among the various counts listed in the indictment, all four were charged with violating Ohio’s Racketeer Influenced and Corrupt Organizations (RICO) Act, a first-degree felony.
“Corey Hazel, who is a licensed real-estate agent, allegedly used his inside knowledge of the mortgage-lending industry to deceive everyone,” Franklin County Prosecutor Ron O’Brien said. “We will continue to investigate any additional allegations of this organized criminal activity.”
Hazel allegedly falsified appraisals by using the name of a southeastern Ohio licensed appraiser, who was totally unaware of the scheme. Additionally, according to the indictment.pdf he allegedly used several shell company names â€“ Residential Investment Corp., Atlantic Investment Corp., Cornerstone Holdings Corp. and Arlington Mortgage â€“ to purchase the properties or to act as bogus first mortgage holders to receive loan proceeds.
In September of this year, a federal indictment was handed down as to other defendants with respect to activities allegedly engaged in by Knab Mortgage.
These are the properties that were purchased and sold in the alleged fraud scheme: