Loan officer Willia T. Burton was sentenced to 2 ½ years in prison for her role in a mortgage fraud scheme involving seventeen properties throughout the Cleveland area and more than $1.5 million in mortgage loans, Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, announced today.
Burton, age 52, resides in Solon, Ohio, according to court documents. She pleaded guilty earlier this year to one count of conspiracy to commit wire fraud.
“Mortgage fraud is still one of the top priorities of this office because of the far reaching and devastating economic impact on our community,” Dettelbach said. “We are focusing a significant portion of the office’s resources, along with our law enforcement partners, to find and prosecute the perpetrators of mortgage fraud in Northeast Ohio.”
Burton prepared mortgage loan applications to various lenders containing false and fraudulent information in the name of various straw buyers/investors, according to court documents.
The scheme lasted between November 2005 and August 2006 and involved homes in Cleveland, Warrensville Heights, Independence, East Cleveland, Cleveland Heights and Shaker Heights, according to court documents.
Burton was a licensed loan officer working at Quick Funding Mortgage. She located properties for sale and negotiated the purchase of these properties at a reduced purchase price. Then, Burton recruited straw buyers/investors to complete loan applications to purchase these properties at an inflated appraised value significantly higher than the purchase price Burton negotiated with the sellers, according to court documents.
Burton advised the borrowers that they would not have to put any money down, and that she would provide them with money at closing. Burton also advised the borrowers that she would pay the mortgage on the properties and secure renters for each property. All the borrowers had to do was to allow Burton to use their names and good credit, according to court documents.
In order for the borrowers to qualify for the loans, Burton falsified their loan applications by overstating the amount of their income, falsifying their employment, overstating their assets and concealing the true source of their down payment funds. Once the loans were approved and funded, Burton submitted fraudulent invoices to the title companies in the names of her shell companies, WTB, Inc., Christian Foreclosure Network and Zap Enterprises, claiming to have done work on the properties or performed services for the parties to the real estate transaction, according to court documents.
Based on these fraudulent invoices, the title companies would distribute the excess funds from the closing to Burton’s companies. However, Burton did not do any work to the property or perform any services to justify her receiving the excess funds, which she converted for her personal use, according to the information.
Burton also enlisted the assistance of an individual and his company to provide the down payment money for several of the straw buyers/investors’ purchases. In order to make it appear to the various lenders that the straw buyers/investors provided the down payment funds from their personal bank accounts, Burton instructed individuals to purchase official bank checks with the straw buyers/investors listed as the “remitter.” Burton instructed individuals to have the official bank checks made payable to the title company she used in the real estate transaction and in the exact amount of the down payment required to close the loan in the straw buyers/investor’s name. After the lender approved the loan and funded the purchase of the property, the title company distributed the down payment funds back to the down payment provider, along with a “profit” amount.
Burton submitted fraudulent mortgage loan applications to, among others, Aegis Funding Corporation, Argent Mortgage Company, LLC, BNC Mortgage, Inc., Colorado Federal Savings Bank, New Century Mortgage Corporation, Option One Mortgage and Wells Fargo, and induced them to approve the loan applications and to fund the purchase of the seventeen properties in the Cleveland area. As a result of the scheme, the vast majority of the properties for which Burton secured mortgage loans went into foreclosure causing a loss of approximately $1,519,200 to various lenders
This case is being prosecuted by Assistant United States Attorney Mark S. Bennett, following an investigation by the Cleveland Offices of the United States Secret Service and the Internal Revenue Service.