Mortgage Fraudster Sentenced to 28 Years
(WSB Radio) -- The man authorities say was the ringmaster of a huge mortgage fraud ring has been sentenced by a federal judge to 28 years in prison. 51-year-old Phillip E. Hill was found guilty of perpetrating a fraud scheme that targeted the metro Atlanta housing and condo market from 2000 to 2003 resulting in multi-million dollar losses to lenders, neighborhoods and individuals.
According to the U.S. Justice Department:
Phillip E. Hill was the owner and operator of "We Build Atlanta, Inc.," "The Estate Firm, Inc.," "Estate Artistians of Georgia, Inc.," "Estates Atlanta, Inc.," and numerous other Georgia corporations. Hill controlled the affairs of each such corporation. Hill held himself out to be a real estate developer, and either individually or through one or more of the corporations he controlled, purchased and sold numerous residential properties in the Atlanta area. Hill oversaw the conspiracy, loan fraud, wire and mail fraud and money laundering activity related to mortgages obtained in the sale of over 50 homes and over 250 condominiums in eight Atlanta-area condominium complexes. These properties were all owned at one time by one of the Phillip Hill entities. Each property was sold at an inflated price to a "straw purchaser" who applied for a mortgage loan based upon the inflated price. Such a fraudulent transaction is called a mortgage "flip."
The straw purchasers who participated in these mortgage flips were paid a kick-back out of the excess loan proceeds for the use of their name and credit. The victim-lenders granted the loans based upon numerous false representations and documents regarding the credit qualifications of the straw purchaser, as well as false representations that the straw purchaser had paid a down payment, would reside in the home, and would be responsible for the loan payment. In addition, the lenders were induced to make the loans based on fraudulently inflated appraisals. Some of the properties were "flipped" more than one time.
Evidence at trial showed that the primary leaders of the complex fraud scheme included Phillip Hill, Leslie Rector, closely assisted by David Van Mersbergen. Hill alone received over $14 million in profits from the scheme. Evidence showed that Hill generated in excess of $112 million in fraudulent loans during the time of the scheme.
The appraisers who created the fraudulent appraisals used in the scheme were Julian Perez, Fred Farmer, and Barbara Brown. According to the evidence, appraisers were paid both their scheduled fees and received separate direct payments from Hill.
The loan officers, who provided submitted the fraudulent loans to the victim lenders included Wayne Jenkins, Theodore Tagalakis, Brant Petree, Wendell Higgs, Michael Flake and Wesley Golden, and Robert Powers. Evidence at trial showed that the loan officers received excessive fees for processing the fraudulent loans.
Hill was convicted of paying kickbacks to "recruiters" who found "straw borrowers" for the scheme. The recruiters included Christine Loudermill and David and Dean Thomas, William Chavis and Rashid Muhammad, who all received hundreds of thousands of dollars in the scheme. According to the evidence, David and Dean Thomas, and David Van Mersbergen also served as "straw borrowers" who received additional kickbacks for lending their credit to the scheme.
As part of the fraud scheme, two attorneys, Christopher Halcomb, of Cumming, Georgia, and Andrew Wolf helped facilitate the fraud by submitting fraudulent documents, and at property closings, facilitating the distribution of the monies to the co-conspirators.
In addition to the 28 year prison sentence, Hill will be on supervised release for five years and has been ordered to pay restitution of $41,764,244.40.
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Looks like the scheme involved crooks in nearly every business field relating to real estate.
(WSB Radio) -- The man authorities say was the ringmaster of a huge mortgage fraud ring has been sentenced by a federal judge to 28 years in prison. 51-year-old Phillip E. Hill was found guilty of perpetrating a fraud scheme that targeted the metro Atlanta housing and condo market from 2000 to 2003 resulting in multi-million dollar losses to lenders, neighborhoods and individuals.
According to the U.S. Justice Department:
Phillip E. Hill was the owner and operator of "We Build Atlanta, Inc.," "The Estate Firm, Inc.," "Estate Artistians of Georgia, Inc.," "Estates Atlanta, Inc.," and numerous other Georgia corporations. Hill controlled the affairs of each such corporation. Hill held himself out to be a real estate developer, and either individually or through one or more of the corporations he controlled, purchased and sold numerous residential properties in the Atlanta area. Hill oversaw the conspiracy, loan fraud, wire and mail fraud and money laundering activity related to mortgages obtained in the sale of over 50 homes and over 250 condominiums in eight Atlanta-area condominium complexes. These properties were all owned at one time by one of the Phillip Hill entities. Each property was sold at an inflated price to a "straw purchaser" who applied for a mortgage loan based upon the inflated price. Such a fraudulent transaction is called a mortgage "flip."
The straw purchasers who participated in these mortgage flips were paid a kick-back out of the excess loan proceeds for the use of their name and credit. The victim-lenders granted the loans based upon numerous false representations and documents regarding the credit qualifications of the straw purchaser, as well as false representations that the straw purchaser had paid a down payment, would reside in the home, and would be responsible for the loan payment. In addition, the lenders were induced to make the loans based on fraudulently inflated appraisals. Some of the properties were "flipped" more than one time.
Evidence at trial showed that the primary leaders of the complex fraud scheme included Phillip Hill, Leslie Rector, closely assisted by David Van Mersbergen. Hill alone received over $14 million in profits from the scheme. Evidence showed that Hill generated in excess of $112 million in fraudulent loans during the time of the scheme.
The appraisers who created the fraudulent appraisals used in the scheme were Julian Perez, Fred Farmer, and Barbara Brown. According to the evidence, appraisers were paid both their scheduled fees and received separate direct payments from Hill.
The loan officers, who provided submitted the fraudulent loans to the victim lenders included Wayne Jenkins, Theodore Tagalakis, Brant Petree, Wendell Higgs, Michael Flake and Wesley Golden, and Robert Powers. Evidence at trial showed that the loan officers received excessive fees for processing the fraudulent loans.
Hill was convicted of paying kickbacks to "recruiters" who found "straw borrowers" for the scheme. The recruiters included Christine Loudermill and David and Dean Thomas, William Chavis and Rashid Muhammad, who all received hundreds of thousands of dollars in the scheme. According to the evidence, David and Dean Thomas, and David Van Mersbergen also served as "straw borrowers" who received additional kickbacks for lending their credit to the scheme.
As part of the fraud scheme, two attorneys, Christopher Halcomb, of Cumming, Georgia, and Andrew Wolf helped facilitate the fraud by submitting fraudulent documents, and at property closings, facilitating the distribution of the monies to the co-conspirators.
In addition to the 28 year prison sentence, Hill will be on supervised release for five years and has been ordered to pay restitution of $41,764,244.40.
************
Looks like the scheme involved crooks in nearly every business field relating to real estate.
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