Khalid Raheem, a/k/a Dwayne Cross, Louisville, Kentucky, pleaded guilty on August 19, 2008, to conspiracy to commit wire fraud and bank fraud.

As previously reported by Mortgage Fraud Blog, the following co-defendants previously pleaded guilty: Edward Ted House, Louisville, Kentucky, Nathan Frisbie, Louisville, Kentucky and Jerry Crenshaw, Louisville, Kentucky.

The Indictment to which they pleaded guilty charged that between January 1, 2000, and May 30, 2003, House and Crenshaw, along with Frisbie and Khalid Raheem, conspired with one another to defraud two residential mortgage lenders. The indictment identifies 24 separate fraudulent loan transactions, totaling approximately $1.5 million, in which the named defendants participated. They defrauded the mortgage lenders through various means. Generally, they provided the lenders with false borrower background information in order to fraudulently induce the funding of individual loans. The defendants would provide lenders with false employment and financial information of an applicant in order to get a loan approved. In addition, they would often misrepresent the payment of earnest money or a deposit from a buyer to a seller. The lenders relied on all these false representations in order to make its decision whether to fund a loan.

For example, House, Frisbie, and, Raheem were fraudulently involved in a $63,750 mortgage loan for the purchase of property located at 801 Dearborn Street, Louisville, Kentucky. In order to fraudulently induce the lender, ABN Mortgage Group, to fund the loan, they provided false and fraudulent information in support of the loan. The fraudulent information included the following: false and fraudulent employment information of the buyer and a closing statement that reflects a fraudulent sales price in that no earnest money or deposit was actually paid by the buyer. Count 1 of the Indictment alleges 21 separate instances in which the defendants conspired to defraud mortgage lenders through manners similar to the above example.

The indictment further charges the defendants with wire fraud and bank fraud. For example, Count 2 charges House, Frisbie, and Crenshaw with obtaining a $59,850 loan for property located at 2712 Algonquin Parkway, Louisville, Kentucky, from National City Mortgage Company under false and fraudulent pretenses. They defrauded National City by providing false information regarding the buyer’s employment and financial information, as well as misrepresenting funds paid by the buyer to the seller. Counts 3 through 5 charge the defendants with similar schemes involving different properties and different lenders.

The case is being prosecuted by Assistant United States Attorney Bryan Calhoun and Robert Kilmartin, and it was investigated by the Federal Bureau of Investigation.

The plea was entered before Thomas R. Russell, Judge, United States District Court, Louisville, Kentucky.

A sentencing date for Raheem is scheduled for December 15, 2008, at 12:00 p.m., in Louisville, Kentucky. Sentencing date for House, Frisbie and Crenshaw is scheduled for September 16, 2008, at 12:00 p.m., in Louisville, Kentucky.