Underwriter Sentenced in House Flipping Scam

admin —  August 7, 2009 — 1 Comment

Michelle Cochrane, 48, Folsom, Louisiana, was sentenced in federal court by U. S. District Judge Carl J. Barbier to one year and one day in federal prison for her role in a conspiracy to make false statements to obtain HUD insurance.Additionally, Judge Barbier ordered the defendant to pay restitution in the amount of $95,000. Judge Barbier considered the cooperation provided to the government by Cochrane in imposing the sentence.

According to court documents, Cochrane conspired with Calvin Davis, and devised a “housing flipping” scheme and their respective roles in that scheme. Cochrane, a former underwriter at Citywide Mortgage, previously pled guilty admitting that while employed at Citywide, she participated in a house flipping scheme in which Davis purchased properties, obtained fraudulent appraisals which overvalued the property and then arranged for the straw buyers to purchase them. Cochrane approved fraudulent FHA/HUD loan applications for the “straw buyers.” The fraudulent loan applications included not only false tax information, but also false credit information and an inflated real estate appraisal. Based on the fraudulent applications, the Department of Housing and Urban Development insured the loans. Citywide then sold the loans to another mortgage company. Various properties eventually went into default and HUD became responsible for paying off those loans.

Cochrane is the 6th person to be sentenced for offenses stemming from this investigation. Davis was sentenced to 40 months pursuant to his pleas of guilty to Conspiracy to Commit Mail Fraud, Making False Statements in an Income Tax Return and Making False Statements in a HUD Transaction. Robert Green, who pled guilty to Making False Statements in HUD transaction and admitted that he prepared the fraudulent tax returns, was sentenced to a probationary term. Three “straw buyers” Timothy Falls, Dennis Addison and Dennis LeBlanc, who also pled guilty to Making False Statements in HUD Transaction were sentenced to probationary terms. Michael O’Keefe, JR., who pled guilty to Making False Statements in a HUD transaction, is awaiting sentencing.

U. S. Attorney Jim Letten announced the sentencing.

The case was investigated by the Department of Housing and Urban Development, Office of Inspector General; the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation Division and the United States Postal Inspection Service. The case was prosecuted by the Chief of the Organized Crime Strike Force Unit, Mark A. Miller and Assistant United States Attorneys Michael M. Simpson and Kevin G. Boitmann.

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One response to Underwriter Sentenced in House Flipping Scam

  1. If mortgage fraud is not the largest scam in world history, then why has the government allowed it to continue unchecked? and why have not laws been changed or rectified to stop it? If you wonder where the church of Satanism gets most of its money, this is it. Like your worst nightmare come true, this is how evil the world has become. If you think it is bad and know it is so, then you must know it is ten times worse than you can imagine.

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