Joyce Davern, 37, Pittsburgh, Pennsylvania, pleaded guilty in federal court to a charge of Wire Fraud Conspiracy before Chief United States District Judge Donetta Ambrose.

In connection with the guilty plea, Assistant United States Attorney Brendan T. Conway advised the court that Davern participated in a large mortgage fraud conspiracy that involved more than 75 loans and more than $4.6 million in loan proceeds. Davern and other members of the conspiracy, including her daughter, Kelly Fields, recruited borrowers to purchase properties at far above the true fair market values of the properties. To secure financing to purchase the properties, Davern and Fields submitted loan applications to lenders on behalf of the borrowers that contained false representations about the borrowers' financial condition. In addition, Davern and Fields submitted fraudulent documents that supported the misrepresentations in the loan applications, including false pay stubs, false W-2s, false Verifications of Employment, and similar types of documents. She also submitted false appraisals to the lenders that overstated the true market value of the properties that were to serve as collateral for the loan.

And finally, Davern and Fields would cause the loan proceeds to be distributed contrary to the representations made to the lender about how the loan proceeds would be distributed. For example, she failed to disclose that the sellers of the properties were paying the buyers' down payments, or that the sellers were otherwise kicking money back to the buyers and other members of the conspiracy.

Judge Ambrose scheduled sentencing for November 14, 2008. The law provides for a total sentence of 20 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.

The Mortgage Fraud Task Force conducted the investigation that led to the prosecution of Davern. The Mortgage Fraud Task Force is comprised of investigators from federal, state and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigations; the United States Department of Housing and Urban Development, Office of Inspector General; the United States Postal Inspection Service; and the United States Secret Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff's Office; the Pennsylvania Attorney General's Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee's Office.