Vernon Cooks, Jr. aka Jibreel Rashad, 40, real estate investor, was convicted after trial by a jury on all counts of a federal indictment that charged him with operating a mortgage fraud scheme in the Dallas, Texas area from approximately May 2003, through December 2004.
Specifically, Cooks was convicted of one count of bank fraud, seven counts of wire fraud, and six counts of money laundering. Cooks is scheduled to be sentenced on July 2, 2007. One other co-defendant, Abdul Rahman Karriem, who was involved in the same scheme has pled guilty and is awaiting sentencing. Co-defendant Deirdre Dione Anderson, who was charged with six counts of wire fraud, was acquitted.
The government presented evidence at trial that Cooks, who held himself out as real estate investor and the owner of “Rashad Investment Group,” knowingly created a scheme to defraud mortgage lenders out of hundreds of thousands of dollars. Cooks used straw purchasers to buy single-family homes in the Dallas, Texas area for amounts far above fair market value. Straw purchasers testified that Cooks paid them to use their names and credit to purchase homes that Cooks was going to rent to others. Cooks told the straw purchasers he would pay all closing costs, mortgage payments and taxes associated with the properties until he transferred them out their names, within six months to a year after closing.
To support the inflated sales prices of the homes, Cooks used fraudulent appraisals. He also caused fraudulent loan applications and other supporting documents, including fraudulent tax returns, W2s, and employment, rent and deposit verifications, to be submitted to the mortgage lenders so that the straw borrowers would qualify for the inflated loans. Once the lenders funded the loans, Cooks used the fraudulently-obtained proceeds to pay off the original, bona-fide sellers and kept the rest of the funds for himself. Cooks then allowed the mortgage loans to default in the straw purchasers’ names.
Karriem's guilty plea specifically admits that on April 4, 2003, Cooks entered into a contract to purchase a residence at 419 North Edgefield Avenue, Dallas, Texas for $130,000 and, on April 8, 2003, he contracted to sell that same residence to a straw purchaser for $221,000. Karriem, who was a mortgage broker and owner of United Mortgage, Dallas, Texas, knowingly submitted to Wells Fargo, a loan application containing material misrepresentations regarding the straw buyer's income, rental history and intent to use the loan proceeds to purchase a primary residence. Wells Fargo funded the $208,229.49 loan. Cooks used a portion of the proceeds to buy the property and caused Signature Title Company to wire the excess loan proceeds of $81,679.14 into his personal bank account. Karriem received over $5,000 of the proceeds.
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.