Department of Justice
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FOR IMMEDIATE RELEASE |
CONTACT: Fred Alverson |
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COLUMBUS - A federal grand jury here has returned a 68-count indictment charging nine people with conspiracy, tax evasion, wire fraud, bank fraud and money laundering for their roles in a mortgage fraud scheme that involved more than 500 pieces of property and more than $25 million in mortgage loans in the central Ohio area between 2003 and 2006.
Gregory G. Lockhart, United States Attorney for the Southern District of Ohio, Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service Criminal Investigation, and J. Mark Batts, Acting Special Agent in Charge, Federal Bureau of Investigation, announced the indictment returned late yesterday.
The indictment alleges
that the defendants conspired to exaggerate the value of real estate properties
in and around Columbus, Ohio, both to lending institutions and to prospective
purchasers. The prospective buyers had been recruited largely because of their
relative ignorance regarding real estate business and investment practices.
The defendants allegedly used fraudulent documents to misrepresent the credit
worthiness of those purchasers to lending institutions in order to get the
institutions to approve excessive mortgage loans secured by the inflated-value
properties.
The indictment charges:
DONALD F. GREEN, age 48, of Columbus. Green sold rental properties he owned
as part of the scheme.
SHAWN A. GRIFFIN, age 37, of Cleveland, a real estate investor who recruited
unwitting buyers.
GEORGE T. "Terry" JORDAN, age 50, of Canal Winchester, a licensed
real estate agent who helped arrange the sales.
ARYEH M. SCHOTTENSTEIN, age 33, of Oak Park, Michigan, real estate investor
who helped recruit individual and organizational investors.
JEFFREY M. LIEBERMAN, age 56, of Bexley, real estate appraiser who helped
prepare exaggerated appraisals of the properties.
DWAYNE L. CARTER, age 37, of Columbus, loan officer who helped arrange the
sales.
JONATHAN L. BOYD, age 38, of Columbus, loan officer who helped arrange the
sales.
JAMES DARNEIL GAITHER, age 37, of Columbus, appraiser who helped prepare exaggerated
appraisals of the properties.
KENYATTA JOHNSON, age 37, of Michigan, loan officer with ABN AMRO who helped
arrange the sales.
A typical pitch used to lure prospective buyers would be to tell them they could buy property with no money down and, in fact, that they would receive money back at closing. They would also be told that they would not be responsible for monthly payments and that repairs would be made to the property without costing them anything.
The defendants allegedly used fraudulent documents and phony appraisals to overstate the value of the properties involved. They would secure mortgages based on the inflated value of the properties, promise repairs and improvements on the property, then take the money and leave the buyer owing more than the property was worth.
The indictment alleges three counts of conspiracy punishable by up to five years imprisonment and a $250,000 fine, four counts of tax evasion punishable by up to five years imprisonment and a $250,000 fine, 25 counts of wire fraud each punishable by up to 20 years imprisonment and a $1 million fine, nine counts of bank fraud punishable by up to 30 years imprisonment and a $1 million fine, and 25 counts of money laundering punishable by up to 10 years imprisonment and a $250,000 fine.
"While financial institutions are the victims of such crimes, entire neighborhoods pay the price," Lockhart said. "Mortgage fraud leaves in its wake vacant houses with liens much larger than the properties are worth."
Lockhart commended the
investigation by IRS and FBI agents and Assistant U.S. Attorney Daniel A.
Brown, who is prosecuting the case.