The Wolf of Ramona! From Channel 6:
SAN DIEGO – A Ramona real estate agent who admitted taking part in an investment and mortgage fraud scheme that generated tens of millions of dollars in phony loans and illegal kickbacks was sentenced Friday to serve 15 months in federal custody.
During a hearing in downtown San Diego, U.S. District Judge John Houston also ordered Teresa Rose, 58, to pay more than half a million dollars in restitution to victims of the offenses.
Rose carried out the scheme along with five others: Mary Armstrong of Las Vegas, an unlicensed mortgage broker who orchestrated the crimes; William Fountain of Los Angeles, Armstrong’s assistant; John Allen of Laguna Hills, a mortgage-loan processor; Justin Mensen of Seattle, a straw buyer who recruited others and helped launder the illicit funds; and Audrey Yeboah of Los Angeles, a tax preparer who generated fake paperwork to support the bogus loans.
All six defendants in the case have pleaded guilty to various charges, including conspiracy, wire fraud and money laundering.
The co-conspirators recruited would-be property investors through advertisements in the Los Angeles Times, Monster.com and other sources, offering them a chance to supposedly purchase homes using their good credit with no money down, according to the U.S. Attorney’s Office in San Diego.
In order to get these people to participate in the fraud, the defendants promised to make the mortgage payments on their behalf using rental income from the properties. In reality, the so-called investors were simply straw buyers who were promised $10,000 for each property purchased as part of the scheme.
Rose helped secure mortgages by falsifying loan applications, prosecutors alleged. Among other things, the paperwork indicated that the borrowers had exorbitant income from non-existent employers, as well as assets they did not actually own.
Armstrong also arranged for the borrowers to obtain 100 percent financing, thus avoiding having to make any down payment on the properties.
Rose acted as both the buyers’ and sellers’ real-estate agent on a number of these sales and convinced the latter to inflate the purchase price by $100,000 or more, allegedly to allow for improvements to the properties. In fact, no construction work took place, and the funds were diverted to bank accounts controlled by Rose’s accomplices.
The conspirators thereby pocketed nearly $15 million in kickbacks, made few if any mortgage payments and allowed nearly all of the properties to swiftly fall into foreclosure, according to government attorneys.
Rose also earned commissions from both the sellers and buyers on each transaction, and took home more than $200,000 for arranging the sales of nine properties in her East County hometown.
In total, Armstrong arranged the purchase of about $100 million in loans through the scheme, resulting in estimated losses between $7 million and $20 million to mortgage lenders and secondary purchasers Fannie Mae and Freddie Mac.
Armstrong, 52, has been sentenced to 100 months in custody; Allen, 44, and Fountain, 57, received terms of 12 months and 42 months, respectively; and Mensen, 32, and Yeboah, 55, were each ordered to serve probation with home detention or house arrest.
The case was investigated jointly by the FBI and Federal Housing Finance Agency.