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First Magnus files Civil Lawsuit Alleging Kansas City, Missouri Mortgage Fraud Scheme

Wednesday, February 08 2006 06:30

First Magnus Financial Corporation (FMFC) filed a civil lawsuit in the Federal Court for the Western District of Missouri, Kansas City Division, against the following defendants whose roles, as indicated in the complaint, are also included:

Summit Mortgage, L.L.C, mortgage broker

Joe Richardson, principal/alter ego, member, employee and/or agent of Summit

Dwayne Maddy, principal, employee and/or agent of Summit

Frank Strauss, principal, employee and/or agent of Summit

Rob Adrian, principal, employee and/or agent of Summit

David L Peterson, appraiser

Peterson Appraisal Service, LLC, appraiser

Edwards Appraisal Services, LLC, appraiser

Terence Edwards, appraiser

David Edwards, appraiser

Jason Morgan, appraiser

Kevin Casburn, appraiser

Nicolace Appraisals, appraiser

Paul E. Nicolace, appraiser

Hometown Appraisals, Inc., appraiser

Hometown Appraisals, LC, appraiser

Hometown Property Management, LC (previously Hometown Appraisals, LC)

Dominique P Allen, appraiser

Dennis C. Kiethley & Associates, appraiser

Dennis C. Keithley, appraiser

Mississippi Valley Title, title

First American Title Missouri Agency, Inc. dba First American Title of Kansas City, title

Premier Title Company, title

Realty Title Company, title

Commonwealth Land Title Insurance Company, title

First American Title Insurance Company, title

Old Republic Ins Co, title

Chicago Title Insurance Company, title

Wade Rustici, property seller

Global Assets, property seller

Brian Valet, property seller

Judy Valet, property seller

Kathy Schilt-Richardson, property seller

Kory J. Oline, property seller

K.C. Rehab Inc. , property seller

Mark Owen, property seller

Mark Meirath, property seller

Becky Meirath, property seller

Paul Zarrillo, property seller

Vicki Zarrillo, property seller

Rebecca Case, property seller

In its complaint, FMFC alleges that the defendants conducted a 'massive scheme of fraudulent real estate transactions' involving 19 flip transactions involving FMFC, in the greater Kansas City, Missouri area. Summit acted as the mortgage broker for all of the transactions.

According to the complaint, each of the fraudulent transactions began with the acquisition of a subject property, usually through a foreclosure sale. After acquiring a subject property, the Defendantss made or claimed to have made cosmetic repairs and quickly flipped it to an unwitting buyer at a much higher price. The repairs were often nonexistent or nominal. In some cases, buyers were not creditworthy, requiring Defendants to misrepresent buyer financial information, employment history and other pertinent financial data.

In order to substantiate inflated contract prices, according to the complaint, the appraisers would manipulate the comps and chose comps that were 'blatantly incomparable' to the subject property in that the subject properties were smaller, shoddier and in less desirable areas than the properties used as comps. In some efforts, inaccurate property attributes were provided. Title companies are alleged to have 'ratified the inflated appraisals' and should have known that the closing statements misrepresented and concealed material facts, namely buyer's financial information, source of the down payment and other material information.

The properties referenced in the complaint are:

419 Montgal, Kansas City, Missouri

2327 Cedar, Independence, Missouri

816 Monroe Avenue, Kansas City, Missouri

126 South Topping Avenue, Kansas City, Missouri

5218 College Avenue, Kansas City, Missouri

4041 Woodland, Kansas City, Missouri

3209 Jackson, Kansas City, Missouri

3015 Quincy, Kansas City, Missouri

2410 Spruce Avenue, Kansas City, Missouri

3426 Indiana Avenue, Kansas City, Missouri

2822 Bales, Kansas City, Missouri

5235 Highland, Kansas City, Missouri

3725 Higland, Kansas City, Missouri

2529 Askew, Kansas City, Missouri

2807 E. 38th Street, Kansas City, Missouri

8320 Sni-A-Bar Road, Kansas City, Missouri

2539 Olive Street, Kansas City, Missouri

1123 East 79th Street, Kansas City, Missouri

The complaint includes causes of action for RICO, RICO Conspiracy, fraud, negligent misrepresentation, negligence, breach of contract and civil conspiracy.

23 comments

  • Comment Link Kenneth Monday, February 15 2010 09:06 posted by Kenneth

    Account rep M. Parker of United Wholesale Mortgage in MI have made several unwelcome sexual advances towards one of our employees during their visit to our offices in MO. complains to United Wholesale Mortgage were ignored without even a response. We have since stop conducting business with UWM.

  • Comment Link shaunda Sunday, June 07 2009 00:52 posted by shaunda

    i am looking for people who have been victums of mortgage fraud who went trough hometown equity mortgage and does any one know about lawsuits filed against them

  • Comment Link Rick Monday, March 02 2009 18:19 posted by Rick

    WOW You ARe SO Mature, Typical, AND YES ITS JASON MORGAN WHO IS DYING

  • Comment Link Rick Sunday, March 01 2009 23:42 posted by Rick

    I would haveto disagree,Jason Morgan Is Dying and has been given months to live. he will has a pickline in his arm witch is attached to a Chemo Pump . Wich Is Why He Lost Over 100LBS. And Is So White Looking |Due To The Chemo.

  • Comment Link Jason Morgan Sunday, March 01 2009 19:58 posted by Jason Morgan

    To whom ever wrote about Jason Morgan having certain ailments, is completely incorrect and Mr. Morgan was exonerated of all charges from the lawsuit without prejudice!

  • Comment Link Richard Sunday, March 01 2009 19:47 posted by Richard

    Jason Morgan Did not do enything ellegal nor did he know of eny dooings of the others, and for putting someone with stage 3 liver/collin some lung cancer in jail wich he may only live a few months behind bars is uterlly insane

  • Comment Link Daniel Friday, February 27 2009 17:18 posted by Daniel

    It is so good to see that all the criminals that worked for this company are starting to get what is coming to them. I was a former employee of the company who never got my last pay check from this corrupt group of people. Any A.E. that says they did not create a fraud loan is full of SH**. Stated income, Stated assets, YOU KNOW YOU DID IT AND LIED ABOUT MAY LOANS.
    GUILTY GUILTY GUILTY

  • Comment Link Shawn Jordan Friday, February 08 2008 10:45 posted by Shawn Jordan

    I truly believe I have been scammed
    by Reis Enterprises, Gary Shartzer
    We refinanced our home not so long ago
    and Reis Enterprises was involved
    along with Mr Gary Shartzer also
    JS Appraisal may have done the appriasal
    on our home for this refinance ...
    What can I do ???
    Please contact my wife Marilyn
    ASAP @
    913.458.4802

  • Comment Link Rene Perrin Sunday, February 03 2008 13:22 posted by Rene Perrin

    My comment about Brian Valet has nothing to do with the lawsuit above. My experience with him was horrible. If anyone wants documentation of what happened including copies of closing statements, financial records, e-mail correspondence or anything else related to my dealings with him, I will be more than happy to provide it to you so tht you can make your own educated and informed judgment. Brian takes absolutely no responsibility for anything. The release that he is so proud of gettting may be the result of the bank being burned so badly that they could no longer afford to pursue the case.
    I can tell you that I am not the only person that he dealt with who has the same opinion of doing business with him. If you'd like that person's name and e-mail address I'll be happy to pass it along.
    Caveat Emptor

  • Comment Link jason Tuesday, January 15 2008 23:14 posted by jason

    I thought Brian was very professional. I bought 7 houses from him. He rehabbed the houses in perfect condition, and then he rented them as he said he would with section 8 renters. He still helps me out. I never had a problem with him, or his company ever.

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Rachel Dollar 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.
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