Conspirators Took Title of Homes from Financially Distressed Homeowners and Secretly Used Home Equity for Furs, Jewelry and Other Personal Benefits; Defendant Caused Over $16 Million in Losses
GREENBELT, Md. (Dec. 19, 2008)—Jennifer McCall, age 47, of Ft. Washington, Maryland, a chief executive officer of Metropolitan Money Store and owner of JC and JC Investments LLC, pleaded guilty Thursday to conspiracy to commit mail and wire fraud in connection with a mortgage fraud scheme that falsely promised to help homeowners facing foreclosure keep their homes and repair their damaged credit, announced United States Attorney for the District of Maryland Rod J. Rosenstein.
“The exceptional cooperation among federal and state investigators on this case serves as a model for other Maryland mortgage fraud prosecutions,” said U.S. Attorney Rod J. Rosenstein. “Jennifer McCall’s entire business model was a sham. Her ‘money store’ was in the business of ripping off homeowners and mortgage lenders by submitting fraudulent paperwork to support loans that would never be repaid.”
“Mortgage fraud, like all financial crimes, adds to the underground economy, erodes the integrity of our tax system and threatens the financial health of our communities,” stated C. Andre' Martin, Internal Revenue Service-Criminal Investigation Special Agent in Charge.
According to her plea agreement, McCall was a licensed mortgage broker, but was not licensed to provide credit repair. In February 2004 Jennifer and her husband Clifford McCall incorporated JC and JC Investments LLC. In May 2005, Jennifer McCall and another conspirator incorporated Metropolitan Money Store, located in Lanham, Maryland, which offered foreclosure consultation and credit services to financially distressed homeowners.
From September 2004 to June 2007, Jennifer McCall conspired with others in a scheme to fraudulently promise to help homeowners, who had substantial equity in their homes but were facing foreclosure because of their inability to make monthly mortgage payments, avoid foreclosure and repair their damaged credit. The homeowners were directed to allow title to their homes to be put in the names of third party purchasers (the straw buyers) for a year, during which time Metropolitan Money Store promised to improve the homeowners’ credit ratings, help them obtain more favorable mortgages, and eventually return title to their homes to them. The homeowners were told that the equity withdrawn from the properties would be used to pay the mortgage and expenses on their homes and to repair their credit. McCall and others paid the straw buyers $10,000 to participate in the scheme. McCall also served as a straw buyer on several properties in Maryland.
Using the homeowners’ properties, the conspirators applied for mortgages to extract the maximum available equity from the homes, and prepared and submitted to mortgage lenders fraudulent loan applications to obtain fraudulently inflated loans on the target properties in the straw buyers’ names. At settlements, the conspirators imposed numerous fees and required “seller contributions” which were far in excess of industry standards. They imposed fees for services which were not performed, disclosed or explained to the homeowners; and they transferred the sale proceeds out of the escrow accounts into the conspirators’ business and personal bank accounts and converted a substantial portion of those funds to their personal use.
In order to carry out the fraud scheme, Jennifer McCall and others obtained large cashier’s checks in the names of straw buyers and Metropolitan Money Store employees in order to conceal transactions from the lenders. McCall misappropriated the license and bond numbers of other brokerage and credit repair companies and used them to broker loans and fraudulently improve homeowners’ credit scores by adding fictitious lines of credit to their credit histories. She also fraudulently notarized settlement documents that were given to lenders to close the loans.
During the conspiracy, Jennifer McCall and another individual provided a co-conspirator acting as a closing agent with more than $58,000 in kickback payments to process real estate closings quickly. Moreover, whenever McCall requested, the closing agent permitted Metropolitan Money Store employees to close loans without him or any other closing agent being present. She directed others to prepare fraudulent settlement documents that contained false information.
Finally, McCall directed others to transfer the equity proceeds of homeowners into the general checking accounts of Metropolitan Money Store, McCall’s investment company, as well as McCall’s personal accounts. McCall withdrew these funds and paid for goods and services for herself, including art, cars, clothing, credit card bills, homes, fur coats, furniture, airline trips, gambling expenses, jewelry, limousine services, student tuition and a luxury wedding for two conspirators.
As a result of this scheme, the total loss attributable to Jennifer McCall, including the estimated losses to the mortgage lenders, is $16,880,884.86.
Jennifer McCall faces a maximum sentence of 30 years in prison and a $1 million fine for the conspiracy. U.S. District Judge Roger W. Titus scheduled sentencing for September 17, 2009 at 9:00 a.m. As part of her plea agreement, McCall has agreed to pay restitution for the full amount of the victims’ losses.
Jennifer McCall is the fifth defendant to plead guilty in the Metropolitan Money Store mortgage fraud scheme. Katisha Fordham, age 35, of Washington, D.C.,a loan processor at the Metropolitan Money Store; Richard Allison, age 37, of Camp Springs, Maryland, an attorney and employee of the U.S. Census Bureau; Clifford McCall, age 47, of Lanham, Maryland, president of Burroughs & Smythe Financial Services, Inc., based in Lanham and a director of the Fordham & Fordham Investment Group, Ltd., a foreclosure consulting and credit servicing business based in Lanham and Greenbelt, Maryland; and Carlisha Dixon, age 31, of Hyattsville, Maryland, vice president and a director of Burroughs & Smythe Financial Services, Inc.; each pleaded guilty to the conspiracy and are facing a maximum sentencing of 30 years in prison.
Source: United States Attorney Rod J. Rosenstein