Kandace Marriott, 52, and Darrell Lynn Marriott, 55, both of Gun Barrel City, Texas and Karen Hayes, 57, Mabank, Texas are all charged with engaging in organized criminal activity. They are indicted for the two underlying offenses of filing false statements to obtain property or credit, and securing the execution of a document by deception. The indictments reveal that the 3 defendants committed at least 88 separate offenses in Kaufman County of making false statements to obtain property or credit.
The Marriotts’ daughter, Kally Marriott, 22, Dallas, Texas, was also indicted on the charge of engaging in organized criminal activity for securing the execution of a document by deception. The indictments mark the second round of indictments issued since last August against the four. In February, Kandace Marriott, Darrell Marriott and Karen Hayes were also indicted in Navarro County on similar charges. The charges are first-degree felonies.
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The charges stem from the defendants’ involvement in a conspiracy to forge signatures and falsify home loan applications, which included creating and using numerous fraudulent documents containing statements the borrowers never made. The fraudulent documents were prepared for prospective homeowners who otherwise would not have qualified for loans backed by the U.S. Department of Housing and Urban Development (HUD).
The defendants have operated a Kaufman County real estate business known as Torenia Inc., which did business as Energy Homes. They continued to operate the enterprise even after the Navarro County indictments were announced last February. The defendants closed their Navarro County business, One Way Home & Land, after litigation and investigations ensued in late 2005. As a result, they opened a Kaufman County firm under the assumed name, Torenia.
Acting on search warrants last August, the Attorney General’s investigators seized numerous assets of the defendants, including 88 plots of land being offered to prospective buyers, and shut down the defendants’ Kaufman County business.
According to state investigators, the defendants’ scheme cost the federal government and taxpayers millions of dollars. Evidence uncovered by the state indicates that the defendants supervised the falsification of residential loan applications to ensure that the buyers’ loans would be approved by mortgage lenders. Investigators found that the defendants repeatedly falsified supporting documents and information, including the buyers’ rent payment verification statements, proof of employment and information about Social Security Administration benefits, among other documents.
Investigators believe the defendants targeted lower-income purchasers whose residential loans would be guaranteed by HUD. As a result, when unqualified buyers defaulted on their home loans, mortgage lenders did not suffer the loss. Rather, HUD as guarantor of the loans, had to cover these costs. In the Navarro County scheme, investigators believe the defendants cost the taxpayers more than $3 million.
The Office of the Attorney General received assistance from the Kaufman County Criminal District Attorney’s Office, the FBI and HUD’s Office of Inspector General. Attorney General Abbott’s Criminal Prosecutions Division is leading the prosecution of the four defendants with the cooperation of district attorneys’ offices in Navarro, Henderson and Ellis counties.
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.