The ringleader of a mortgage borrowing fraud organization has been sentenced to federal prison, William J. Leone, acting U.S. Attorney for the District of Colorado, announced last week.
Roderick Wesson, 42, was sentenced to 14 months in federal prison for conspiracy to defraud the United States for his role in implementing a scheme in which certain mortgage lenders, real estate agents and borrowers lied in order to finance home purchases.
Wesson also was ordered to pay $142,434 in restitution.
“Falsifying information in order to fraudulently obtain a mortgage loan is a crime, and those involved in mortgage loan processing should know that the United States Attorney’s Office will continue to vigorously prosecute those who engage in this type of conduct,” Acting U.S. Attorney Leone said in a statement.
Wesson and 27 others were indicted by a federal grand jury in Denver on Feb. 24, 2004, charged with conspiracy to defraud and making false statements to Department of Housing and Urban Development. Of the 28 people indicted, Wesson and three other defendants pled guilty to felony conspiracy charges, according to the U.S. Attorney’s office. Nineteen defendants, all of whom were loan borrowers, pled guilty to misdemeanor false statements in a HUD transaction.
One other defendant borrower was convicted by a jury of felony charges of making false statements to the Executive Branch. Charges against four other defendants were dismissed. The borrower-defendants received probationary sentences for their crimes. Some were ordered to pay restitution ranging from $914 to $37,977 to HUD for defaulting on their home loans.
According to Wesson’s plea agreement, he and co-defendant Warren Williams and others were engaged in a conspiracy to aid potential home buyers by falsifying information in loan applications submitted to mortgage companies and to HUD for the purpose of obtaining mortgage loans and FHA/HUD mortgage insurance.
The defendants falsified social security numbers, verifications of employment, and prepared and submitted false income information, including false W2’s and pay stubs, in order to obtain the mortgage loans. They also prepared false credit reports, and created other false documents in furtherance of the scheme.
Co-defendants Wesson and Williams would then receive a fee of $500 to $1,000, often times in the form of a “kickback” following the completion of the loan.
Williams was sentenced by Judge Matsch to serve 18 months in federal prison and ordered to pay restitution in the amount of $142,434 with Wesson to HUD.
The false mortgage applications made it appear that the borrowers were financially qualified for a mortgage. In some cases, the borrower ultimately defaulted on the mortgage, requiring the FHA/HUD mortgage insurance to compensate the lender for the loss.
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