Eight Indicted In Major Mortgage Fraud Scheme

GREENBELT, Md. (June 12, 2008) - A federal grand jury has indicted eight individuals with conspiracy to commit mail and wire fraud, mail fraud and money laundering, in connection with a massive mortgage fraud scheme which promised to help homeowners facing foreclosure keep their homes and repair their damaged credit, but left them homeless and with no equity, announced United States Attorney for the District of Maryland Rod J. Rosenstein. The indictment was returned yesterday and unsealed today upon the arrest of the defendants.

Joy Jackson, age 40; her husband, Kurt Fordam, age 38, of Ft. Washington, Maryland; Jennifer McCall age 46; her husband, Clifford McCall, age 47; McCall’s daughter, Chandra Jones, age 30; Wilbur Ballesteros age 32, all of Lanham, Maryland; Kurt Fordham’s sister Katisha Fordham, age 35, of Washington, DC; Ronald Chapman, age 33 of Washington, DC, are charged with conspiracy to commit mail and wire fraud and 15 counts of mail fraud to obtain money and property from homeowners and lenders through their “foreclosure reversal” scheme. Jackson and Kurt Fordham are also charged with six counts of money laundering and Jennifer McCall, Clifford McCall and Chandra Jones are each charged with one count of money laundering.

“Homeowners who fall behind on their mortgage payments should be wary of con artists who claim that there is an easy way to avoid foreclosure,” said U.S. Attorney Rod J. Rosenstein. “Just as get-rich-quick schemes are usually fraudulent, get-out-of-debt-quick schemes are usually phony, too. The indictment alleges that the defendants used a ‘foreclosure-prevention’ scheme to cheat homeowners out of the remaining equity in their houses by transferring their homes to straw buyers. The defendants then defrauded lenders by inducing them to make new loans based on inflated appraisals and fraudulent credit applications.”

“These types of crimes create a significant loss of tax revenue, drive buyers into foreclosure, leave lenders burdened with bad loans and neighborhoods with abandoned and deteriorating properties. IRS Criminal Investigation is committed to pursuing individuals who commit these types of crimes," said C. André Martin, Special Agent In Charge of the Washington Field Office.

“We are using every available tool in our regulatory arsenal to protect Maryland homeowners from fraud and other unscrupulous practices,” Secretary Thomas E. Perez of the Maryland Department of Labor, Licensing and Regulation, said. “We appreciate the leadership of the U.S. Attorney in this case, and we look forward to a continued partnership with the federal government to ensure individuals who prey on distressed homeowners are brought to justice.”

According to the indictment from September 2004 through June, 2007, the defendants, operating through several companies, including the Metropolitan Money Store, controlled by Joy Jackson and Jennifer McCall, fraudulently promised to help homeowners avoid foreclosure, keep their homes and repair their damaged credit, by directing the homeowners to allow title to their homes to be put in the names of third party purchasers (the straw buyers) for a one year period, during which time the defendants would help the homeowners obtain more favorable mortgages, improve their credit rating and eventually return title to their homes to them. The defendants told the homeowners that the equity withdrawn from the properties would be used to pay the mortgage and expenses on their homes and to repair their credit.

In fact, the indictment alleges that the defendants: paid approximately $10,000 to each of the straw buyers to participate in the scheme; fraudulently bolstered the credit of the straw buyers so they could qualify for more favorable mortgages; obtained fraudulently inflated loans on the properties in the straw buyers names; stripped away the bulk of the homeowners equity proceeds and converted that money to their own personal use; and stopped making the mortgage payments on the homes, resulting in the homes being foreclosed upon. According to the indictment, the defendants used the proceeds of the scheme to pay their personal expenses including art, cars, fur coats, international trips, gambling expenses, jewelry, limousine services, student tuition and a luxury wedding for Jackson and Kurt Fordham.

As a result of the scheme, the indictment alleges that the defendants obtained over $35 million in fraudulent loans on over 100 homes and the homeowners suffered losses of over $10 million in stripped equity. The indictment also seeks forfeiture of $35,873,150 obtained as a result of the scheme, including 11 properties owned by the defendants.

“I want to applaud U.S Attorney Rod Rosenstein and his staff, as well as the financial regulation investigators at the Maryland Department of Labor, Licensing and Regulation, for their hard work in securing the indictment of eight individuals who defrauded at least 100 vulnerable homeowners out of millions of dollars in equity. Today’s indictment illustrates that by working together with the federal government, we can bring to justice those who exploit Maryland homeowners, and we can do more to preserve homeownership in Maryland," said Governor Martin O’Malley in a prepared statement.

“Together with the General Assembly, we enacted a comprehensive package of sweeping reforms to better regulate the mortgage industry and protect homeowners, including two bills aimed at cracking down on fraud and banning foreclosure rescue scams like the ones we are now prosecuting. Those new laws, along with the indictments handed down today, should send a strong message that Maryland will leave no stone unturned and will not tolerate the actions of those who defraud our homeowners, take advantage of our families and weaken our communities,” added O’Malley.

The defendants all face a maximum sentence of 30 years in prison and a $1 million fine for the conspiracy and each of the 15 mail fraud counts. Jackson, Kurt Fordham, Jennifer McCall, Clifford McCall and Chandra Jones also face 10 years in prison and a $250,000 fine on each count of money laundering. Joy Jackson and Kurt Fordham were arrested in Raleigh, North Carolina and had their initial appearances there this morning. The remaining defendants are scheduled for initial appearances this afternoon in federal district court in Greenbelt, beginning at 2:15 p.m. Ronald Chapman has not been arrested and is still being sought.

An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

Source: United States Attorney Rod J. Rosenstein

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