Nathan J. Brinkle, 30, Kansas City, Missouri and Jonathan T. Jennings, 34, Lee’s Summit, Missouri were sentenced this morning to three years of probation, including six months’ house arrest for their roles in a scheme to defraud home buyers and mortgage lenders of more than $6 million. The court also ordered Brinkle and Jennings to pay approximately $2.4 million in restitution, which was the amount of actual loss by the mortgage lenders.
On June 2, 2005, Brinkle and Jennings, along with co-defendant Adam T. Kerr, Kansas City, Missouri, pleaded guilty to wire fraud and money laundering. A sentencing hearing for Kerr has not yet been scheduled.
Brinkle and Jennings, doing business as Brighter Homes East, Inc., and JB Renovations, both Kansas City, Missouri businesses, purchased and rehabilitated distressed properties for resale to investors. Kerr was a mortgage broker doing business as Platinum Mortgage II and later Pearl Mortgage in Kansas City, Missouri and he assisted the investors in obtaining mortgage loans.
According to Bradley J. Schlozman, United States Attorney for the Western District of Missouri, investors were advised that once they took possession of the
properties, all of the rehab work would be completed and Section 8 tenants would be allowed to occupy the homes, thereby generating cash flow for the investors. These investments were represented as no-money-down investments. To accomplish this, Schlozman said, the appraised values were inflated and on some occasions loan applications were prepared to falsely show the source of the down payment was the investor.
All three of the co-defendants admitted that they prepared various loan applications and supporting documents for the purchasers, which contained material false and fraudulent representations and admissions, which they submitted to the lending institutions to insure that the loan applications would be approved. As a result of this scheme to defraud, Schlozman said, between May 23, 2001, and August 30, 2002, the defendants made and submitted to lending institutions 94 false and fraudulent loan applications. The misrepresentations included: false installment payments information, falsified HUD-1 Settlement Statements, phony contracts for deeds, money provided at closing, and other pertinent information relied on by the lenders when making the loan.
As a result of the misrepresentations during this period, Schlozman said, various lenders made loans in an approximate total amount of $6,388,150, which were funds sent by wire transfers and interstate commerce.
Additionally, on October 19, 2001, Brinkle, Jennings and Kerr engaged in monetary transactions involving criminally derived property, through the deposits of checks payable to Platinum Mortgage II, drawn primarily on the accounts of Brighter Homes East, Brinkle and Jennings.
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.