Two men were indicted in connection with allegations that they engaged in a $2.3 million dollar mortgage fraud scheme in Greater Cincinnati, Ohio over the course of several years. The fraud scheme has already resulted in 30 guilty pleas.
Troy Scott Clements and Ralph Edward Mitchell were named as defendants in a twenty one counts indictment including charges of conspiracy, bank fraud, money laundering and mail fraud.
According to the indictment, Clements was a private mortgage lender in Southwest Ohio and operated under trade names of American Funding, T.C.T. Contracting and Troy Clements, Trustee. American Funding’s offices were co-located with the offices of Airline Union’s Mortgage Company, a Cincinnati, Ohio mortgage brokerage. Mitchell worked as a loan officer for Airline Union during 2001, 2002 and 2003.
The indictment alleges that , beginning prior to April 20, 2001, Clements, Mitchell and their co-conspirators would recruit home buyers via, among other means, newspaper solicitations or bulk mailing advertisements for 100% financing with no money down. Generally, Clements would allow buyers to locate property that he would review for potential value and, if he determined he could ensure it could be refinanced for the final buyer, he would then purchase the property as Troy Clements, Trustee. Clements would then resell the property to the client borrower and have the client sign a note and mortgage to American Funding in an amount higher than what Clements paid for the property – the increase was referred to as an ‘investor fee.’ Clements would then direct employees of Airline Union to arrange for a refinance loan from a legitimate mortgage lender. False documents were created to support the applications including false retirement statements, VODs, VOMs, VOEs, debt payoffs and appraisals.
The indictment alleges than financial institutions were defrauded of over $2.3 million and over $1.5 million was laundered.
Property transactions detailed in the indictment include:
322 Millville Avenue, Hamilton, Ohio
5956 Flaig Drive, Fairfield, Ohio
5417 French Court, Cleves, Ohio
9895 Arborwood, Cincinnati, Ohio
5337 Globe Avenue, Cincinnati, Ohio
7421 Bernard Avenue, Cincinnati, Ohio
3918 South Fordham Place, Hamilton, Ohio
19 Eland Court, Fairfield, Ohio
3956 Trevor, Cincinnati, Ohio
2871 St. Rt. 132, New Richmond, Ohio
3426 Miami Court, Cincinnati, Ohio
7942 Albritton Place, West Chester, Ohio
6747 Plum Street, Goshen, Ohio
160 Arlington Drive, Franklin, Ohio
819 Central Avenue, Newport, Kentucky
2182 Harrison Avenue, Cincinnati, Ohio
6925 Buckingham Place, Cincinnati, Ohio
Both defendants were arrested and released on their own recognizance.
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.