Owner of Ohio Mortgage Company Sentenced

admin —  August 17, 2007 — Leave a comment

Glen Hurst, 56, Dayton, Ohio, was sentenced to serve 30 months of incarceration, 2 years of supervised release, and ordered to conduct 100 hours of community service for his role in a conspiracy to launder money and for income tax evasion. Previously, on May 25, 2006, Hurst plead guilty to the aforementioned charges.

According to court documents and testimony, between August 1997 and March 2004, Glen Hurst conspired with Earl Marshall, Debra Hurst, Janell Stephens, and others to launder wire fraud proceeds and to launder the proceeds of an illegal source. Glen Hurst was the owner/operator of American Funding Group, Inc. (hereinafter, “American Funding“), a mortgage brokerage firm in Dayton, Ohio. Earl Marshall, Janell Stephens, and others were clients of American Funding.

Earl Marshall secured, either for himself or others, mortgage loans through American Funding. Earl Marshall provided information, much of it false, to American Funding, which was used to create fraudulent documents in support of loan requests. Glen Hurst was aware that these documents were based, at least in part, on false information provided by Earl Marshall and others. These loan requests were submitted to lenders and they were approved based in part on the fraudulent information.

The financial resources needed for the loans came from Earl Marshall, even if he was not otherwise connected on paper to the transactions. Glen Hurst was aware that these financial transactions were conducted in part to conceal Earl Marshall‘s financial involvement in the real estate financial transactions, and that the money used was coming from an illegal source. One of the objectives of creating the fraudulent loan packages was to obtain funds for people who were not qualified to receive those funds and to obtain commissions for American Funding and its employees.

Fraudulent loans were secured for the purchase of 272 Valley View Drive, Dayton, Ohio; 4424 Genesee, Dayton, Ohio; 2285 Diamond Mill Road, Brookville, Ohio (twice); 106 Deans Court, Union, Ohio; 6600 Westford Avenue, Dayton, Ohio; 5104 Gardendale, Dayton, Ohio; as well as the mortgage/refinance loan for 2516 Germantown, Dayton, Ohio.

Glen Hurst willfully attempted to evade or defeat the income tax due to the IRS by failing to file a 1999 income tax return; failing to pay income tax to the IRS on the income he received; failing to file the 1999 corporate income tax return (Form 1120s) and Schedule K-1 with the IRS for American Funding; and by paying American Funding employee’s gross wages without any employment tax withholdings. All of this was done by Glen Hurst in an attempt to conceal his true source of income and the amount of income from the IRS. The total tax loss to the IRS in this case was $55,733, of which $38,046 was attributable to the 1999 income tax year and $17,687 was attributable to the 2000 income tax year.

Additionally, on June 8, 2007 Debra Hurst was sentenced to serve two years of probation and ordered to perform 50 hours of community service for willfully failing to file Employer’s Quarterly Federal Tax Returns, Forms 941, with the IRS. Previously, on August 24, 2006, Debra Hurst plead guilty to the aforementioned charge.

According to court documents and testimony, Debra Hurst was an employee of American Funding. During 2003, American Funding had employees who were paid wages. Debra Hurst was the responsible official for American Funding that was responsible for securing federal withholding taxes from the American Funding employees, and for filing the appropriate employment tax forms with the IRS.

For the four respective quarters in 2003, Debra Hurst caused federal withholdings to be withheld from American Funding employees. However, Debra Hurst knowingly failed to file Forms 941, Employer’s Quarterly Federal Tax Returns, on each of the quarterly due dates reflecting these federal withholding amounts, as she was required by law to do. American Funding employees were not issued Forms W-2 for the wages and withholding taxes attributable to them due to their employment.

In another related case, on November 16, 2006, Janell Stephens, Kettering, Ohio, was sentenced by United States District Judge Thomas M. Rose to time served plus two years of supervised release and 100 hours of community service for her role in a conspiracy to launder money. As Stephens criminal case went through the judicial process, she spent 85 days and jail and another 14 months on home confinement. Previously, on May 9, 2006, Stephens plead guilty to the aforementioned charge.

According to court documents and testimony, Stephens was an associate of Earl Marshall. On or about March 31, 1999, Stephens, Earl Marshall and others agreed that they would conduct financial transactions that would disguise the true source of funds used for the purchase of a piece of property and also disguise the subsequent occupancy/ownership of that property, 4424 Genesee Avenue, Dayton, Ohio. The purchase price of the property was approximately $60,000 with a down payment of approximately $5,600. The purchaser on paper was Stephens, but the true occupants/owners were members of the Earl Marshall family.

Stephens, Earl Marshall and representatives of the mortgage brokerage firm American Funding agreed together to supply the lender false documentation concerning Stephens as the purchaser of the property.

Jose A. Gonzalez, Special Agent in Charge, IRS, Criminal Investigation, stated, “Money laundering is not a victimless crime. Not only are innocent people “duped” by various schemes, but the underground, untaxed economy harms the entire nation’s economic strength.”

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