Eleven people were arreted in Mississippi on criminal complaints charging them in a multi-million dollar mortgage fraud scheme. Seven of the defendants, Patrick McGee, Marvin Dawson, Anthony Burroughs, Thomas Griffin, Edward Young, Fransene Berry, and Shane Rothery, are charged in one complaint with conspiracy to commit mail fraud. The other four defendants, Kelvin Brooks, Tellis McLin, Lyndon Posey, and Leroy Garrett, are charged in separate complaints with mail fraud. All of the defendants are being charged in connection with a mortgage loan fraud scheme arising out of the buying and selling of houses, most of which were located in Madison County, Mississippi.

According to the complaints, the defendants were buying and selling the same property on the same day, a practice known as “flipping.” McGee, Burroughs, Griffin, McLin, Posey and Garrett would purchase homes most of which cost from $200,000.00 to over $600,000.00. Young, Berry and Rothery provided inflated appraisals to the lenders allowing the homes to be “flipped,” i.e. sold on the same day for an inflated amount, either to unsuspecting buyers or to one of the co-conspirators participating in the scheme. Dawson, operating as Premier Mortgage, brokered all of these loans between the lenders and the borrowers. The defendants would then divide the profits from the “flip,” which ranged from a few thousand dollars to several hundred thousand dollars on each property. Brooks was involved in purchasing at least one of these properties.

In addition to inflated appraisals, other fraudulent information was provided to lenders to obtain these loans, including false employment and income information, false financial information, cashier’s checks falsely reflecting that the borrower brought down payment money to the closing, and other false documents used to facilitate the loans. Most of the 15 properties involved in the complaints are in Madison County, Mississippi neighborhoods. The total amount involved in the fraud on these particular properties is approximately $6.7 million.

U. S. Attorney Dunn Lampton stated that “Flipping homes based upon inflated appraisals is a fraudulent practice which harms not only lenders but those homeowners who live near these properties. Our office will prosecute this type of mortgage fraud to bring to justice those people who are enriching themselves by committing crimes at the expense of borrowers, lenders and other homeowners.”

The investigation is continuing and other charges are expected in the near future.