A federal judge has sentenced a former mortgage loan officer convicted of organizing a Washington, D.C., house-flipping scheme involving mortgage fraud to more than 24 years in prison.
In sentencing Charles E. Hall Sr. to serve 293 months in prison and to pay restitution of $5.04 million, Judge Sterling Johnson called the former loan officer “a predator” whom the community must be protected from.
A jury convicted Hall, 37, in August of conspiracy, bank fraud, wire fraud and money laundering. Prosecutors said the former Guaranty Residential Lending loan officer organized a conspiracy to flip more than 30 homes, netting more than $5.2 million.
Hall recruited straw buyers and submitted loan applications listing false assets, income and other information to apply for $14 million in loans, according a statement released by U.S. Attorney Jeffrey A. Taylor.
The mortgages on all but one of the 32 properties involved had defaulted and foreclosed or were sold before foreclosure for a loss, prosecutors said. Two banks that financed the sales resold the properties for less than the amount of the original loans, for a net loss in excess of $5 million.
Five others charged in the scheme have also entered guilty pleas.
Robbie Colwell, who was paid to write appraisals that inflated the values of the properties, pleaded guilty to conspiracy to commit bank fraud. Prosecutors said Colwell was not a licensed appraiser but used other appraisers’ names and licenses to write “completely fabricated reports on the value of the houses.”
Nearly all of the appraisals claimed the homes had undergone complete rehabilitation and remodeling, when in fact none had renovated kitchens or bathrooms, many had crumbling walls and ceilings, and one was merely a shell, with no interior walls or floors at all.
Two former Guaranty Residential Lending loan underwriters also pleaded guilty for their roles in the scheme. Marcus Wiseman and Susan Conner. Wiseman or Conner approved every one of the 32 loans listed in the indictment, prosecutors said, taking payments from Hall to approve loans that did not meet the bank’s underwriting standards or to speed them through the process.
When Wiseman and Conner left Guarantee Residential for National City Mortgage, Hall used a loan broker to take his business to National City — a competitor of his employer — where Wiseman and Conner continued to approve his loans. Wiseman pleaded guilty to a misdemeanor of improperly accepting payments as a bank officer, and Conner pleaded guilty to bank bribery.
Alan R. Davis, along with another person doing business under the name “Network Venture Capital,” purchased properties for Hall, often flipping them to straw buyers on the same day. A single property transaction could generate between $150,000 and $400,000 in cash — the difference between the sales price Davis or Network Venture Capital paid and the sales price created when the property was resold to the straw purchaser — prosecutors said. Alan Davis pleaded guilty to conspiracy to commit bank fraud.
Also entering a guilty plea for conspiracy to commit bank fraud was settlement agent Vicki Robinson. Robinson gave part of each bank loan to either Davis or Hall, who converted the money into a cashier’s check in the amount that the straw purchaser was supposedly making as a down payment. By creating the illusion that the buyers were bringing their own money to the table as a down payment, the co-conspirators “tricked the banks into loaning enormous mortgages grossly in excess of the actual value of the properties,” prosecutors said.
