Three Sentenced in Operation Wax House

Rachel Dollar —  September 4, 2015 — Leave a comment

Nathan Shane Wolf, 44, Charlotte, North Carolina and John Wayne Perry, Jr., 34, Charlotte, North Carolina, and Purnell Wood, 44, were sentenced on federal racketeering charges in connection with their roles in the Operation Wax House fraud scheme.

Wolf, a licensed real estate agent, was sentenced to seven years in prison followed by three years of supervised release. Wolf was convicted by a jury in October 2013. According to trial evidence, Wolf was a participant in the enterprise’s mortgage fraud operations, accounting for over $13 million in fraudulently-obtained loans, with losses of more than $7 million. Witnesses testified that Wolf arranged for builders of luxury real estate to pretend to sell such real estate at an inflated price – what Wolf called the “gross price” – in order to get an inflated mortgage loans from a bank. In reality, the builders accepted the true, lower, price – what Wolf called the “strike price” – while Wolf arranged for the difference between the inflated price and the true price to be paid from the loan proceeds as kickbacks. Such kickbacks were funneled through sham companies and disguised to look like payments for work actually done on the real estate. Trial evidence established that the work was never done, but instead these kickbacks were payments to the buyers and promoters who helped bring the parties to the fraud together. According to the evidence at trial, the kickbacks generally ranged from approximately $50,000 to almost $600,000. According to the sentencing hearing, Wolf received more than $200,000 in commissions on the fraudulent transactions, which represented the vast majority of his income during the years he was committing fraud.

Perry was sentenced to 24 months in prison followed by two years of supervised release. According to court records and the sentencing hearing, Perry served the Enterprise as a promoter in its mortgage fraud operations, arranging a fraudulent transaction that resulted in a loss of approximately $500,000. More than $200,000 in kickbacks were then funneled through Perry’s bank account following the closing. Perry and his co-conspirators falsely represented the kickback money was for brick work done on the property.

Wood was sentenced to 21 months in prison followed by one year supervised release. According to court records and the sentencing hearing, Wood also served the Enterprise as a promoter in its mortgage fraud operations, arranging two mortgage fraud transactions with losses of more than $1.5 million, funneling nearly a half million dollars in kickbacks through his sham company following closing. Wood and his co-conspirators falsely represented that this kickback monies were for payment for home improvements.

In pronouncing the sentences, Senior U.S. District Judge Graham C. Mullen noted that the calculated losses did not include the effects on the neighborhoods where houses purchased through fraud were located and that the victims of this fraud extended beyond the lending institutions to other people who lived in those neighborhoods and saw their property values negatively impacted by the fraud.

The convictions are the latest in Operation Wax House, an investigation which began in 2007. Of the 91 individuals charged, 89 defendants have either pleaded guilty or have been convicted following trial. The two remaining defendants are international fugitives. Of the 89 defendants convicted, two remain to be sentenced.

The names and case numbers of the all the defendants charged to date in Operation Wax House are listed below, organized by their alleged role in the scheme.

Attorneys and Paralegals

  • Crawford/Mallard, Michelle 3:11cr374
  • Gates, Christine 3:09cr100
  • Norwood, Kelli, 3:09cr162
  • Rainer, Demetrius 3:08cr239/241
  • Smith, Troy, 3:08cr264

Bank Insiders

  • Brown, Jamilia, 3:10cr124
  • Eason, Danyelle, 3:10cr116
  • Henson, Vic. F., 3:10cr124
  • Jackson, Mitzi, 3:11cr374
  • Ramey, Bonnie Sue, 3:10cr124

Builders and Sellers

  • Fink, James, 3:11cr374
  • Jackson, Jennifer, 3:09cr241
  • Smith, Kelvis, 3:12cr238
  • Viegas, Jeffrey, 3:12cr298
  • Wittig, Mark, 3:12cr335
  • Wood, Gary, 3:09cr208

Facilitators and Financiers

  • Hickey, Denis, 3:09cr103
  • McClain, Landrick, 3:10cr124
  • Mitchell, Ann Tyson, 3:12cr239
  • Panayoton, Sherrill, 3:11cr176
  • Taylor, Alicia Renee, 3:10cr124
  • Wilson, Willard, 3:09cr161

Buyers

  • Banks, Arketa, 3:12cr297
  • Clarke, Benjamin, 3:12cr239
  • Hillian, Kirk, 3:12cr83
  • Mathis, Charles, 3:10cr1
  • Mobley, Sarena, 3:10cr124
  • Moore, George, 3:12cr337
  • Richards, Dan, 3:10cr119
  • Smith, Kevin, 3:12cr341
  • Tyler, Glenna, 3:11cr200
  • Vaughn, Mary, 3:12cr329
  • Wallace, Jamaine, 3:12cr330
  • Wellington, William, 3:12cr333

Notary Public

  • Willis, Anthony, 3:09cr218
  • Myles, Denetria, 3:12cr239

Appraiser

  • Darden, Clinton 3:10cr108

Mortgage Brokers

  • Bradley, Bonnette, 3:12cr299
  • Clarke, Linda, 3:10cr120
  • Flood, Ericka, 3:10cr124
  • Goodson-Hudson, Crystal, 3:12cr339
  • Mahaney, Robert, 3:12cr340
  • Scagliarini, Coley, 3:11cr374
  • Staton, Walter, 3:10cr113
  • Vaughn, Danielle, 3:12cr329
  • Williams, Marcia, 3:12cr334
  • Williams, Sean, 3:12cr336
  • Woods, Joseph, 3:09cr178

Real Estate Agents

  • Belin, Chris, 3:11cr374
  • Clark, Christina, 3:09cr44
  • Lee, Shannon, 3:12cr338
  • Pasut, Holly Hardy, 3:12cr331
  • Wolf, Nathan Shane, 3:12cr239

Promoters

  • Amini, Ramin, 3:12cr239
  • Barnes, Vonetta Tyson, 3:12cr239
  • Brown, William, 3:12cr239
  • Bumpers, Travis, 3:12cr239
  • Carr, Stephen, 3:10cr124
  • Clarke, Reuben, 3:10cr120
  • Coleman, Gregory, 3:10cr118
  • Desimone, Frank, 3:12cr239
  • Dooley, Lori, 3:12cr239
  • Hitchcock, Jimmy, 3:11cr374
  • Hubbard, Glynn, 3:12cr239
  • Hunt, Victoria, 3:12cr239
  • Hunter, Toby, 3:12cr239
  • Johnson, Ralph, 3:12cr239
  • Jones, Steven, 3:12cr239
  • Jones, Tyree, 3:10cr230
  • Long, Waylon 3:13cr98
  • Marshall, Michael, 3:07cr283
  • McDowell, John, 3:12cr239
  • McPhaul, Elizabeth, 3:10cr114
  • Mehr, Kurosh, 3:12cr239
  • Moye, Melvin 3:13cr99
  • Newland, Matthew, 3:12cr239
  • Perry, John Wayne, Jr., 3:12cr239
  • Perry, Kim, 3:10cr25
  • Phillips, Rick, 3:10cr115
  • Saddig, Nazeere, 3:12cr239
  • Sharreff-El, Drew, 3:10cr124
  • Sherald, Kiki, 3:10cr117
  • Simmons, Aaron, 3:09cr240
  • Snead, Todd, 3:10cr124
  • Staton, Lisa, 3:10cr113
  • Thorogood, Donte, 3:12cr239
  • Tyson, Carrie, 3:12cr239
  • Tyson, James, Jr. 3:12cr239
  • Tyson, James, Sr., 3:12cr239
  • Wellington, Phillip, 3:12cr332
  • Wood, Purnell, 3:12cr239

Operation Wax House in the Western District of North Carolina is being handled by the Charlotte Division of the FBI and the Criminal Division of the IRS for the Financial Fraud Enforcement Task Force, along with the Securities Division of the North Carolina Secretary of State with respect to a separate prosecution. The Operation Wax House prosecution is being handled for the government by Assistant United States Attorney Maria K. Vento.

Acting U.S. Attorney for the Western District of North Carolina, Jill Westmoreland Rose was joined in making the announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI).

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