Six area individuals charged in $14 million mortgage fraud scheme

Six area individuals charged in $14 million mortgage fraud scheme

A federal grand jury in Kansas has charged six Kansas City area individuals in a $14 million mortgage fraud that preyed on low-income homebuyers.

The indictment described a scheme that relied on false real estate appraisals that inflated the value of homes, so banks would lend more money than property was worth. The indictment said the additional funds ended up in defendants’ accounts.

The indictment names Wildor Washington Jr., 37, of Leawood; Maurice Ragland, 33, of Lee’s Summit; Victoria Bennett, 34, of Leawood; Kara E. Robinson-Franks, 37, of Grandview; Scott Alexander, 69, of Merriam; and Terrence Cole, 41, of Kansas City, Kan.

None could be reached Thursday.

Each is charged with conspiracy to commit mortgage fraud and wire fraud. All but Cole are also charged with money laundering.

The defendants owned or worked for several businesses involved in the alleged scheme: Heritage Financial Investments, Legacy Enterprises, B&L Custom Development, Liberty Escrow, TERM Appraisers, the Real Estate Group, JTF Enterprises and Atlantic Mortgage.

The fraud’s targets were homebuyers with low incomes or little knowledge about real estate, according to the indictment. It said these homebuyers were unaware of the fraudulent information in the loan applications.

It said the defendants also imposed excessive fees and higher interest rates when borrowers were completing the loans at closing.

At least one borrower received a “lulling letter” that the indictment said induced him to accept the costlier loan by promising a new loan in six to nine months. The letter also promised to pay various fees “because of extenuating circumstances that occurred with your loan” and promised to pay for a credit repair service for the borrower.

The group validated the fraud by stealing the identities of legitimate real estate appraisers, according to the charges. They found appraisers’ license numbers on the Internet and forged signatures, or in some cases “cut and paste” legitimate signatures onto false appraisals, the indictment said. The fraud also relied on nonexistent appraisers whose identities the group created.

In the indictment, the grand jury also cited multiple false earnings claims for Robinson-Franks that helped her qualify for loans. For example, the indictment alleged that loan applications in October, November and December 2003 falsely claimed her monthly earnings were $14,000, $21,958 and $24,403, respectively.

The loan fraud was committed in 2002, 2003 and January 2004, the indictment said. All of the properties involved are in the Kansas City area.

To reach Mark Davis, call 816-234-4372

By MARK DAVIS, The Kansas City Star

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