James Elliott Coleman, 58, Raytown, Missouri and James Lynn Woolard, 54, Gladstone, Missouri were charged with mortgage and investment fraud. The 11 count indictment alleges that between February 4, 2002 and May 21, 2003, Coleman and Woolard caused mortgage lenders to approve nine fraudulent loans totaling $778,336.
Coleman and Woolard allegedly solicited a widow and her daughter to invest in real estate. They prepared false loan applications and supporting documentation to submit to mortgage lenders and caused inflated appraisals to be prepared for the properties, the indictment says. Coleman and Woolard they would manage the investment properties that the rental income would cover the mortgage payments and also told the investors they would have no financial obligations for the properties.
The men are also accused of convincing the widow to invest in a nonexistent low-income housing development.
Coleman was also charged in a separate four-count indictment with embezzling $47,368 a charter school of which he was president. Coleman is alleged to have repaid part of the embezzled funds with money he made in the mortgage fraud.
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.