Real Estate Agent Admits to $2.4M Mortgage Loan Fraud

Allison Tussey —  April 20, 2011 — Leave a comment

Jodi D. Robinson, 38, Richmond, Virginia, a real estate agent and owner of Citicorp Investments, a Virginia LLC, pled guilty to a five-year mortgage loan fraud, in violation of Title 18, United States Code, Section 1341. Robinson is facing a sentence of 30 years in prison and a fine of $1 million dollars when she is sentenced by Chief United States District Judge James R. Spencer on July 31, 2011.

Robinson was charged via criminal information and thereafter admitted to obtaining 16 different fraudulent real estate loans in amounts totaling $2.4 million in a four-part scheme that defrauded Washington Mutual Bank; Sun Trust Bank; the Federal National Mortgage Association, known as Fannie Mae; the Federal Home Loan Mortgage Corporation, known as Freddie Mac; and the U.S. Department of Housing and Urban Development’s (HUD) Section 8 Rental Voucher program for needy individuals. The total loan losses were approximately $1.2 million. The total losses to HUD were approximately $105,000. Robinson is facing 30 years in prison and $1million in fines.

There were four overlapping parts of the scheme. First, on real estate transactions where Robinson was simply the real estate agent, she and her accomplices would misrepresent the creditworthiness of the borrowers in a wide variety of ways. A frequent misrepresentation on the loan applications related to the borrowers’ employment status and involved the overstatement of the monthly employment income.

The second part of the scheme related to real estate transactions in which Robinson was not merely an agent, but was buying and selling properties that she rented out. On these, she secretly used nominees or straw parties to purchase the rental properties using mortgage loans.

The mortgage loan applications were thus fraudulent in that they did not disclose (i) Robinson as the real party in interest, (ii) Robinson’s true creditworthiness, especially in concealing all the other loans for which she was secretly liable on other nominee transactions, and (iii) the fact that the properties were not owner-occupied. In addition, the financial information on the nominee borrowers was falsified to fraudulently enhance the buyers’ creditworthiness, in the same way as in the selling agent realty transactions.

A third part of the scheme was a fraud on the U.S. Department of Housing and Urban Development’s (HUD) Section 8 Rental Voucher program for needy individuals. After the nominee purchases were completed, Robinson, the nominee, maintained the ownership interest, paying the mortgage and managing the property. With many of the properties, Robinson applied with HUD to have herself and her properties qualified to participate in HUD’s subsidized rental program, making her eligible to receive tenant referrals and direct rental payments from HUD. In this process, Robinson induced HUD to transmit the rental subsidy directly to her. She then used to the money to make the monthly mortgage payments to the banks.

The fourth part of the scheme also related to the rental properties. To make more money on these properties, Robinson would “sell” the properties at a higher price to another nominee/straw party, who would fraudulently obtain another mortgage loan in the same way previously described. Robinson thereby obtained access to the proceeds of the new loan. Thus, as part of the sham sale, Robinson would take the proceeds of the new mortgage loan, payoff the existing mortgage loan (which was less than the new loan), pay the transactional expenses, and then convert the remainder of the money to herself.

Neil J. MacBride, United States Attorney for the Eastern District of Virginia; Kenneth R. Taylor, Special Agent in Charge of HUD’s Office of Inspector General; Keith Fixel, the Inspector in Charge of the Postal Inspection Service; and Michael Morehart, Special Agent in Charge of the FBI, announced today’s guilty plea.

The case was investigated by HUD’s Office of the Inspector General, the United States Postal Inspection Service, and the FBI, Richmond Division. Assistant United States Attorney David T. Maguire is prosecuting the case for the United States.

 

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Allison Tussey

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