A 28-year-old house flipper from Kansas City, Mo., has been sentenced to five years in prison without parole and ordered to pay $4.9 million in restitution after pleading guilty to mortgage fraud conspiracy and money laundering.
Prosecutors said Jeffrey Tyler Wine admitted to conspiring to defraud mortgage lenders by convincing them to loan investors $17.6 million to purchase 280 residential properties from November 2001 to May 2005.
Wine purchased, rehabilitated, managed and sold residential properties in the area, acquiring them at reduced rates at foreclosure, tax and bankruptcy sales. After the properties were renovated, they were advertised as investment properties available for no money down, prosecutors said.
Investors, who prosecutors said were also victims in the scheme, were told that Wine’s company, Sunrise Equities Inc., would provide down payments and cover closing costs, secure renters for the properties, and manage them for the first year after purchase. Victims were told Sunrise would make mortgage payments even if the properties were not rented, and that positive cash flow was guaranteed.
Co-conspirators included mortgage brokers who prepared false and fraudulent loan applications and supporting documents to submit to mortgage lenders in the names of victim-investors, prosecutors said. Wine and co-conspirators sometimes provided money to the investors to deposit into their bank accounts to mislead the lenders regarding the buyers’ assets, or furnished money for the victim-investors to take to closing to pay the buyers’ closing costs.
False monthly reports were generated for investors, which supposedly documented rent received and expenses incurred, prosecutors said, and investors received payments based on the income the properties were said to be generating to induce them to purchase more.
Prosecutors said Wine created and operated a number of businesses to perpetrate the scheme, prosecutors said, including Sunrise Equities Inc., Sunrise Assets LLC, Sunrise Investments Holdings LLC, Brooklyn Properties LLC, Arsenal Investments LLC, Sunrise St. Louis LLC, Woodland Properties and Larch Investments.
Wine pleaded guilty to mortgage fraud conspiracy and money laundering in July 2006, and was sentenced Wednesday by U.S. District Judge Dean Whipple to five years in federal prison without parole.
The case was prosecuted by Assistant U.S. Attorney Linda Parker Marshall, and investigated by the Federal Bureau of Investigation, the IRS Criminal Investigation Division and HUD’s Office of Inspector General.