Archives For Flipping

ChieduGeorge” Chukwuka , 47, Stone Mountain, Georgia, was sentenced to serve nine years in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $5,868,243.80 in connection with his lead role in a mortgage fraud ring that spanned five years and caused millions in losses.  Chukwuka, along with his co-defendants and other co-conspirators, engaged in a massive property-flipping scheme resulting in over $5.8 million in actual losses to financial institutions between 2006 and 2011. Chukwuka pled guilty to conspiracy to commit wire fraud on August 10, 2015.

“At the height of the recent mortgage-fraud crisis, this property-flipping scheme caused scores of homes to fall into foreclosure, costing financial institutions millions of dollars in losses,” said U. S. Attorney John Horn.  “Many communities in our district have been decimated by mortgage fraud during the last 15 years and even now struggle to recover from the effects of these schemes.”

According to U.S.A. Horn, the charges and other information presented in court:  Chukwuka, along with his co-defendants and co-conspirators, recruited straw buyers to purchase homes at a discounted price, typically a bank-owned or distressed property.  The group then recruited a second straw buyer to purchase the same home at a dramatically inflated price. In turn, Chukwuka, his co-defendants and co-conspirators applied for an acquisition loan for the second straw buyer, supporting the loan application with false income, fake employment, and fraudulent net worth data.

The group profited from their scheme by pocketing the acquisition loan proceeds paid by the victim bank to the straw seller (who was the straw purchaser in the first transaction). The amount of profit was the difference between the price paid by the straw purchaser in the first transaction and the price paid by the straw purchaser in the second transaction, less transaction costs.  Since none of the straw purchasers made any significant loan payments, the targeted properties usually went into foreclosure, resulting in over $5.8 million in actual losses to financial institutions between 2006 and 2011.

The sentencing of Mr. Chukwuka brings to a close a lengthy investigation and prosecution of a criminal enterprise that targeted the banking industry through their prolific mortgage fraud schemes.  Mr. Chukwuka, considered by law enforcement and prosecution to be head of this enterprise, caused extensive damage with high loss amounts to those victim banks involved.  The FBI is pleased with the role it played in bringing about this sentencing to federal prison of Mr. Chukwuka as well as the previous sentencings of his co-defendants in this matter,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.

The following five defendants also pleaded guilty for their roles in the scheme, and were previously sentenced as follows:

  • Shelly Gee, a/k/a Shelly Baker, 48, Atlanta, Georgia, was sentenced on November 10, 2015, to one year, six months in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $2,243,909.99. Gee pled guilty on June 17, 2015.
  • Sandra Petgrave, 43, Stone Mountain, Georgia, was sentenced on December 4, 2015, to one year, six months in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $1,051,970.77. Petgrave pled guilty on August 18, 2015.
  • Kennedy Simmonds, 54, Snellville, Georgia, was sentenced on December 17, 2015, to three years, ten months in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $5,868,243.80. Simmonds pled guilty on July 6, 2015.
  • Marcelle Welch, 37, Stone Mountain, Georgia, was sentenced on December 17, 2015, to two years, three months in prison, followed by three years of supervised release, and ordered to pay restitution in the amount of $2,554,189.25. Welch pled guilty on July 29, 2015.
  • Leah Freeman, 43, Atlanta, Georgia, was sentenced on December 17, 2015, to two years in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $1,828.532.94. Freeman pled guilty on June 19, 2015.

The defendants were sentenced by U.S. District Court Judge Timothy C. Batten, Sr.

In a related case, Chinedum Oli, 42, Snellville, Georgia, was sentenced on February 19, 2013, by Senior U.S. District Court Judge Marvin H. Shoob to five years in prison, followed by five years of supervised release, and ordered to pay restitution in the amount of $4,373,281.63. Oli pled guilty on October 9, 2012.

The cases were investigated by the Federal Bureau of Investigation.

Assistant United States Attorneys Jamie L. Mickelson and Steven D. Grimberg prosecuted the cases.

 

Charles Wooden, 48, Stone Mountain, Georgia, was sentenced to seven years in prison to be followed by three years of supervised release, and to pay restitution of $2.4 million. Hendrickx H. Toussaint, 44, a now disbarred lawyer, Decatur, Georgia, was sentenced to three years, ten months in prison to be followed by three years of supervised release, and to pay restitution of $1.2 million.  The sentenced arise out of a real estate-based Ponzi scheme that took in almost $5 million dollars from out-of-state and foreign investors.

According to U.S. Attorney John Horn, the charges, and other information presented in court: In or about 2009, Charles Wooden, doing business as Aeon Capital Management, LLC, held himself out to the public as a real estate broker who could locate and oversee the purchase of residential properties and apartment buildings for or on behalf of real estate investors.  Wooden purported to find properties that could be flipped in a short period for a profit, and also properties that he would manage for the investors.  Continue Reading…

Cecil Sylvester Chester, 68, accountant, Mitchellville, Maryland; Michael Gerard Camphor, 59, real estate agent, Baltimore, Maryland; and Christopher Andy Kwegan, 58, real estate agent, Randallstown, Maryland were indicted by a federal grand jury on charges arising from the fraudulent purchase of seven properties in Baltimore, Maryland, using fraudulent loan documentation and straw purchasers, resulting in losses of over $1.7 million. Continue Reading…

Stephen Mayer, 51, Miami, Florida, was sentenced by U.S. District Judge Susan C. Bucklew to 11 years and 3 months in federal prison for his role in a real estate flipping and equity skimming conspiracy. The Court also ordered him to pay more than $3.1 million in restitution to the affected lenders, and more than $4 million in forfeiture, which were proceeds traceable to the scheme.

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Benny Chetcuti, Jr., 60, Walnut Creek. California, was sentenced to 51 months in prison, and ordered to pay $21,823,526.10 in restitution, as well as forfeit $3,968,995 in proceeds obtained from a multi-year real estate investment fraud scheme. Continue Reading…

Tri-State Holdings-32, LLC, and principals Brandon Miller and Tony Caldwell, are the subject of a lawsuit for allegedly running a scam house-flipping business. The suit alleges that they quickly flipped homes and sought new buyers to purchase homes already sold to other consumers who had stopped paying. Existing homeowners often found that deeds had not been recorded in their name, offering no protection from the house being resold out from under them.

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Five defendants have been sentenced for their roles in a mortgage fraud conspiracy perpetrated in the Eastern District of Texas involving illegal property flipping, falsification of documents, including HUD-1 Settlement Statements, down payment fraud, and loan application misrepresentations.

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Anatoliy Azarov, 33, Sacramento, California, pleaded guilty to mail fraud for a mortgage fraud scheme involving 24 residential properties. The defendant and his co-conspirator convinced investors to purchase their inventory of properties at inflated prices and used the excess funds as working capital to continue their business. Continue Reading…

Jason Springer, an attorney, and Rick Makohoniuk, a real estate agent, were both convicted of bank fraud after an eight-day jury trial. Springer was convicted of seven counts of bank fraud, and Makohoniuk was convicted of one count of bank fraud, in connection with a short sale/property flipping scheme.

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Joshua Clymer, 28, San Francisco, California, was sentenced to two years in prison for conspiracy to commit mail and wire fraud in connection with a loan origination and property flipping mortgage fraud scheme.  Continue Reading…