The federal trial of Demetrius Barren and Julian Bishop is proceeding in Chicago and expected to last one to two weeks. Barren and Bishop were indicted in July 2002 along with Carl Miller and Kenneth Washington, in connection with an alleged property flipping scheme in Chicago, Illinois. Witnesses testifying the first day of trial included Kenneth Washington and alleged victim/borrower Renault Robinson Jr.
According to an NBC5 story, Robinson, who worked as a school janitor making $28,000 a year, said Barren sold him three buildings for nearly $300,000 in mortgage loans from three different lenders, with no money down. The properties were not rehabilitated despite promises. Washington testified that he overvalued the properties in appraisals at the request of Barren.
The original indictment alleged a scheme whereby Barren would locate and purchase dilapidated properties in Chicago, Illinois and have appraisers, such as Washington, prepare inflated appraisals that concealed the need for rehabilitation and repair. Potential purchasers would be told that no down payments or closing costs would be required and that Barren would assist with mortgage payments.
The loan applications would be processed through loan officers and brokers such as Miller and Bishop. False information and/or documents including false verifications of deposit, employment and income and inflated appraisals would be submitted to lenders to support loan applications for unqualified borrowers. The properties would then be flipped to the borrowers at inflated values. Click here to view the indictment
Carl Miller and Kenneth Washington previously entered guilty pleas.
Rachel Dollar, the editor of Mortgage Fraud Blog is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors.