Kenneth G. Titus Sr., 60, a former plumber from Scotia, New York and the principal of Redwood Trust in Rotterdam, New York was indicted on charges of mail fraud, wire fraud and money laundering in connection with allegations that he ran a mortgage elimination scheme that defrauded numerous homeowners of millions of dollars.
(Redwood Trust of Rotterdam has no connection to Redwood Trust Inc. in Mill Valley, California, a publicly traded real estate investment firm.)
According to authorities Titus is believed to have collected over $4.2 million in fees from nearly 1,000 people. In January, 2005, IRS agents seized over $2.4M from bank accounts controlled by Titus.
Titus claimed that Redwood Trust was a charitable organization that could pay off mortgages for homeowners and churches, as well as erase credit card debt and child support payments. He claimed to have access to humanitarian funds that could be used to provide financial assistance to people who were in debt.
The charges carry potential maximum penalties of 20 years in prison for each count of mail and wire fraud, and 10 years in prison for each count of money laundering. Each count carries a maximum potential fine of $250,000.
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.