Did anyone pick up on this arrest by the FBI Monday morning? Charged with fraud.

More in the MortgageFraudBlog

Mary Reagan, closing attorney, 39, Alpharetta, Georgia, was charged in a superseding indictment along with Adriene Newby-Allen, aka Cassandra Miller, 39, Alpharetta, Georgia; Brinson Allen , 38, Alpharetta, Georgia; and James Howard Bailey, III, 35, Houston, Texas, on charges of conspiracy, bank fraud and wire fraud in connection with an alleged mortgage fraud scheme.

From the news:

An Alpharetta lawyer was arrested by the FBI Monday morning for her role in an alleged mortgage fraud scheme.

Closing attorney Mary Reagan, 39, also made her initial appearance in federal court today. She was charged in a superseding indictment along with three other co-defendants on charges of conspiracy, bank fraud and wire fraud.

The federal grand jury has charged Reagan and co-defendants Adriene Newby-Allen (a/k/a Cassandra Miller), 39, of Alpharetta; Brinson Allen, 38, of Alpharetta; and James Howard Bailey III, 35, of Houston. The indictment alleges Reagan's co-conspirators got mortgage financing and home equity loans from federally insured and private lenders. The loan values, which ranged in the aggregate from $2.5 million to $3.2 million, were inflated based upon allegedly false credit applications, including false representations regarding borrower income, employment and assets, and inflated appraisal reports.

Reagan, who operated her own real estate practice and closed several of the loans at issue in the indictment, is alleged to have disbursed millions of dollars in loan proceeds to defendant Newby-Allen. The government also alleges Reagan disbursed loan proceeds inconsistently with the settlement statements she prepared and disclosed to the victim lenders or to have prepared multiple settlement statements -- one that was disclosed to the lender to facilitate her alleged fraud scheme and another that was disclosed to the seller to ensure that the seller proceeded to closing and did not blow the whistle.
The fraudulent disbursements amounted to millions of dollars in loan proceeds not going to the sellers of the subject properties, with Reagan allegedly getting $40,000 in kickbacks.

"The FBI and other federal investigative agencies continue to aggressively investigate mortgage fraud," U.S. Attorney David E. Nahmias. "... We are focusing attention on real estate professionals, including closing attorneys, who allegedly abuse their fiduciary obligations to mortgage lenders for significant personal profit and the substantial financial gain of their alleged co-conspirators."

Good for them - they deserve it.

Somewhere there is an appraiser with soiled britches...

The last closing attorney prosecuted by the Feds in the Northern District of GA received 30 years. Ouch!

CLOSING ATTORNEY SENTENCED TO 30 YEARS IN PRISON IN $20 MILLION MORTGAGE FRAUD
August 24, 2004

FOR IMMEDIATE RELEASE

David E. Nahmias, United States Attorney for the Northern District of Georgia; Gregory Jones, Special Agent in Charge, Federal Bureau of Investigation; and William G. Creel, Special Agent in Charge of the Southeast Region, Housing and Urban Development (HUD) Office of Inspector General, announce CHALANA C. MCFARLAND, 37, a/k/a “Chalana Cosby,” a former Atlanta area real estate closing attorney who later moved operations to Miami, Florida, was sentenced by United States District Judge Thomas W. Thrash, Jr., on charges of conspiracy, bank fraud, wire fraud, mail fraud, identity theft, fraudulent use of social security numbers, money laundering, obstruction of justice, and perjury.

MCFARLAND was sentenced to 30 years in federal prison. She was also ordered to pay restitution of $11,588,465.45, and ordered to serve 5 years supervised release. MCFARLAND has been in custody since her conviction on all 169 counts of the indictment by a federal jury on February 15, 2005, following her two week trial.

MCFARLAND was originally indicted on May 13, 2004. Also indicted at various times and subsequently pleading guilty to charges related to the multi-million dollar mortgage fraud scheme initiated and orchestrated by MCFARLAND were: paralegals BRENDA G. BROWN, 45, of Lithonia, Georgia and LISA R. BELLAMY, 33, of Decatur, Georgia; mortgage broker CLAUDE BLEVINS, 59, of Roswell, Georgia; loan originators RENEE MEEKS, 51, of Stone Mountain, Georgia; JUDITH H. “JUDY” HOOPER, a/k/a “Jerry Dale Hunter,” 55, formerly of Atlanta, Georgia, LATONYA CROMARTIE, 37, of Marietta, Georgia, MELINDA RENEE TYNER, 33, of Lawrenceville, Georgia, GEORGE TOOMER, 65, of Stone Mountain, Georgia, and JAMES THOMAS PATTERSON, 31, of Fayetteville, Georgia, appraiser BRANDON G. WILHITE, 29, formerly of Jonesboro, Georgia; realtors and property locators THOMAS CHRISTOPHER DAVIS, SR., 35, of Atlanta, Georgia, JEWEL WILLIAMS, 38, of Atlanta, Georgia, and SIDNEY WILLIAMS, 39, of Atlanta, Georgia; straw borrowers MELVIN HOWARD QUILLEN, 35, of Philadelphia, Pennsylvania, formerly of Jonesboro, Georgia, CARLA WHITE, 41, of Decatur, Georgia, and HUEY WHITE, 54, of Lilburn, Georgia; bank employee DEYSHA SIMPSON, 35, of Atlanta, Georgia; money launderer and property manager LUPITA, MCCARTHY, 52, of Stone Mountain, Georgia; and identity thief OMAR RASHAD TURRAL, 25, of Lauderhill, Florida.

According to the evidence presented in court, MCFARLAND was the leader and organizer of an extensive mortgage fraud scheme from mid-1999 through late 2002 involving over a hundred properties in the Atlanta area. At the direction of MCFARLAND, the defendants defrauded financial institutions and other mortgage lenders by fraudulently inflating property values and submitting false borrower qualifying information to obtain mortgage loans, using mailings and wire transfers of false qualifying information and scheme proceeds. The defendants conspired to use either stolen identities and false Social Security Numbers as borrowers or paid straw borrowers to apply for mortgage loans totaling approximately $20 million. False employment, income, assets and liabilities were listed on loan applications to qualify borrowers for these loans. Fraudulently inflated loan proceeds were removed at closing, laundered through The MCFARLAND Law Firm escrow accounts and disbursed to various shell or “air” companies for the benefit of MCFARLAND and her co-conspirators. Most of the properties were ultimately foreclosed by the lenders and sold for significantly less than their outstanding loans.

The residential properties so purchased by MCFARLAND and her co-conspirators were primarily located in the Mountain Oaks, North Shore, Southland and Waters Edge subdivisions in Lithonia and Stone Mountain, and in Sugar Hill, Snellville, Decatur, Clarkston, Fayetteville, Douglasville, Fairburn, and Griffin, Georgia. These properties were then resold, often on the same day, at artificially inflated prices, using the proceeds of the resale to pay for the initial purchase, a practice commonly referred to as “flipping.”

During this conspiracy, MCFARLAND owned and operated The MCFARLAND Law Firm, located first at 4820 Redan Road, Stone Mountain, Georgia, and later at 900 North Hairston Road, Stone Mountain, Georgia. While acting as agent for title insurance companies and the closing attorney for various lenders, MCFARLAND caused false HUD-1 Settlement Statements to be signed certifying that she received borrower down payments and disbursed loan proceeds as reflected on the statements, when in fact her receipts and disbursements were not accurately reflected on the settlement statements. MCFARLAND paid her identity thief co-conspirator $10,000 per stolen identity, the primary appraiser who inflated property values over $400,000, and other co-conspirators from her escrow account without reflecting such payments on the settlement statements, while failing to collect the required borrower down payments listed on the statements.

Paralegal BRENDA BROWN was sentenced to 7 years, 3 months in prison on June 29, 2005. Paralegal LISA BELLAMY, was sentenced to 3 years, 5 months in prison on June 29, 2005. BRANDON WILHITE, a former appraiser who inflated many of the home prices, was sentenced to 7 years, 3 months in prison on June 29, 2005. JUDITH H. “JUDY” HOOPER, who changed her identity and left the United States in the summer of 2000, was apprehended in March 2005 by the Royal Canadian Mounted Police and returned to the United States where she pleaded guilty and awaits sentencing. To date, 17 defendants have been sentenced in this case.

United States Attorney David Nahmias said of the case, “The evidence in this case showed that CHALANA MCFARLAND was a master of mortgage fraud. As a closing attorney she had a responsibility to ensure that buyers, sellers, and documents were real and truthful, but instead she corrupted the entire system for her own profit. This is one of the largest cases of mortgage fraud in this district which devastated a number of local communities, and we believe the 30 year sentence in this case is entirely appropriate.”

The case was investigated by Special Agents of the FBI, with assistance from US Postal Inspectors, HUD-OIG, the DeKalb County District Attorney’s Office, and the Florida A&M University Police Department. The United States Attorney’s Office also wishes to thank residents and neighborhood associations in DeKalb County for their assistance in this case.

Assistant United States Attorneys Barbara Nelan and Gale McKenzie prosecuted the case.

For further information please contact David E. Nahmias, United States Attorney or F. Gentry Shelnutt, Chief, Criminal Division, through Patrick Crosby, Public Affairs Officer, U.S. Attorney's Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.usdoj.gov/usao/gan.

Sent the story about the Monday arrest to my wife. She laughed her butt off. That attn. cheated my wife (a real estate agent) out of a commission about 3-4 years ago(my wife has held a grudge ever since).

My wife just said "HAHAHAHAHA...what goes around comes around....HAHAHAHAH"