December 2, 2008 - Morning Session

Re-Cross Examination of US witness, Ed Hyne, MetLife Custodian of Records (formerly First Horizon Mortgage)

US Prosecuting Attorney Kenny introduced First Horizon's corporate appraisal review of the Jordan home purchase of 211 E. Whispering Oaks, Lone Jack, MO. Over objection by Attorney Bradshaw (Miller), overruled Mr. Hyne testified that an appraisal analysis would not detect comparables used in the appraisal being built by the same builder.

New Witness: Steve Carlson, Carlson Homes

Direct Examination by US PA Kenny

Mr. Carlson is the owner of Carlson Homes, a construction business. Started in late 2003, Mr. Carlson was searching for capital, when he telephoned his childhood friend, Steve Vanatta. Vanatta arranged a meeting with himself, Miller and Carlson. They discussed a development that was for sale in Carl Junction, MO., Near Joplin, Missouri, the development was called Ruestmont Heights. The three formed a partnership and purchased the development. The business agreement was proceeds of the sale of constructed homes: 50% to Miller, 25% to Vanatta and 25% to Carlson. Carlson would oversee the construction of the homes.

Mr. Carlson testified that he did not set the price nor market the homes in Ruesmont Heights. When asked whether he was paid his 25% share on each home he constructed, he answered, 'No'. If a buyer only qualified for an 80% loan and required Star Land and Development to hold a second mortgage on the home, then the mortgage proceeds would need to pay off the construction loan and closing fees.

At times, Mr. Carlson would deal with Sandra Jo Harris, trying to get bills approved for payment by Star Land. Carlson testified that he never authorized payment of 'Construction Management Fees' or paid fees to HCI, Innovative Designs, or Hallie Irvin. Nor did these companies or people do any construction work on the homes.

New Witness: George Njau, purchaser of a Carl Junction, MO home.

Direct Examination by US PA Kenney

Mr. Njau saw a Star Land and Development advertisement in the Joplin (MO) Globe newspaper. He spoke with Steve Vanatta about a home in Carl Junction, MO. Vanatta advised Njau that his wife could not participate in a mortgage application because of her outstanding student loans. He testified that the price of the home they elected to purchase was changed from $175,000 to $195,000. His income as a graphic designer was $1600 per month.

Attorney Kenny presented 3 sales contracts to the witness. Mr. Njau testified that two of the contracts had his forged signature on them.

The first home that the Njau's considered was 404 Hodge. When they toured this home, Mr. Njau testified, they found painted signs on the wall, calling the developer a crook. They also noticed cracking in the basement floor and foundation. Although they first considered purchasing the home, they eventually moved on to 402 Angel Lea, another Miller home in the same development.

Cross Examination of George Njau by Attorney Reible (Miller)

Ms. Reible reviewed three different sales contracts signed by the Njau's. Mr. Njau testified that he hadnt seen the forged Sales Contracts until Federal Agents became involved: "The agents came to my house. They showed me the documents that I had never seen before." They had moved in early to the home and had no where else to move. The title company was 'Synergy Title Services' and Njau testified that that was a Miller related company.

Upon closing three months after moving into their home, the Njau's questioned the price increase in the home to $195,000 from the agreed upon $175,000, the title agent told them that the paperwork would be held, pending the questions they had.

Ms. Reible asked about the 2nd mortgage note held by Jeff Miller and Star Land and Development. Mr. Njau testified that the 2nd mortgage has never been recorded with Jackson County, MO. and that he has never made a payment on the second mortgage.

The Njau's 'walked out' of their home in November, 2007. He testified that before purchasing the home, he had good credit and when they left the home, his credit wouldnt qualify him to apply for a rental home.