Daniel McMullen, Special Agent in Charge of the Federal Bureau of Investigation (FBI) in Mississippi, and James C. Lee, Special Agent in Charge, Internal Revenue Service – Criminal Investigation (IRS-CID), New Orleans Field Office, stated that JEFFREY LYNN WALKER, age 47, was arrested on November 2, 2010, by FBI agents in Nashville, Tennessee, pursuant to an arrest warrant issued on October 21, 2010. WALKER was indicted on October 20, 2010, by a federal grand jury in the Southern District of Mississippi. The indictment alleges 12 counts of wire fraud, tax evasion, and money laundering.
The indictment is the result of a joint investigation by the Jackson Field Office of the FBI and the IRS-CID. According to the indictment, WALKER, a former NFL football player, has been involved in a scheme to defraud investors located in Mississippi, Tennessee, Florida, and Arizona out of millions of dollars.
WALKER, who previously resided in Madison County, Mississippi, allegedly devised a scheme to defraud and obtain money from investors by making false and fraudulent representations relating to a resort project in China being developed by his companies, Charter Resources International and Sterling Group Holdings, Inc. To further the scheme, the indictment alleges that WALKER sold shares in Charter Resources International and executed joint venture agreements between companies, in which he held a controlling interest, and investors to share in profits to be generated from the sale of estate homes, town homes and patio homes in the China resort. The indictment states that WALKER caused investors to make interstate bank wire transfers and, as part of the scheme, WALKER then deposited investor funds into Sterling Group Holdings, Inc.’s bank account and converted portions of those funds to his own personal use and benefit, purchasing four-wheelers, a luxury conversion van, and a Hummer H-2 vehicle. WALKER is also accused of making false declarations to the Internal Revenue Service, through which he failed to report all of his taxable income for the years 2004, 2005 and 2006.
WALKER will make his initial appearance in the United States District Court of the Middle District of Tennessee. It is expected that extradition proceedings will commence and that WALKER will be returned to Mississippi to face these charges against him. This case is being prosecuted by Assistant United States Attorneys Jerry Rushing and Carla J. Clark.
The public is reminded that an indictment and warrant for arrest contain only charges and are not evidence of guilt. Defendants are presumed innocent and are entitled to a fair trial, at which the government has the burden of proving guilt beyond a reasonable doubt.

JACKSON, MS—Gene A. Bradford, 38, of Ridgeland, was sentenced in federal court yesterday to serve 48 months in federal prison followed by 3 years of supervised release for mortgage fraud, U.S. Attorney Donald R. Burkhalter announced. U.S. District Judge David Bramlette also ordered Bradford to pay restitution in the amount of $581,508.50.

Bradford, who pled guilty in November, 2008 to federal money laundering charges in connection with a $1 million mortgage loan fraud scheme, worked as a mortgage broker in Hinds County and Madison County doing business as Guardian Financial Group, LLC. From January 2003 through approximately December 2004, Bradford, and others acting at his direction, prepared false documents to insure that lenders would make mortgage loans to prospective borrowers. If the mortgage loans were successful, Bradford received a fee for his brokerage services. In order to obtain funding for borrowers who were otherwise unqualified to receive mortgage loans, Bradford, and others acting at his direction, would fabricate various kinds of documents, including fictitious social security benefit statements, false income and/or employment information, false verifications of rent, or false verifications of bank funds on deposit. False entries were also included on HUD-1 Settlement Statements submitted to various lenders with the final loan packets which reflected that the borrower paid cash at the closing of the loan when no such funds were paid by the borrower.

This case was the result of a joint investigation by the Internal Revenue Service and the United States Postal Inspection Service, assisted by other participating agencies in the Jackson Financial Crimes Task Force, including the Federal Bureau of Investigation, Federal Deposit Insurance Corporation-Office of Inspector General, Housing and Urban Development-Office of Inspector General, Mississippi Secretary of State’s Office, Mississippi Real Estate Commission and Appraisal Board, Mississippi Department of Banking and Consumer Finance.

The trustee in a bankruptcy case tied to a multimillion-dollar mortgage fraud allegation has filed a malpractice complaint against the debtor’s brother and is seeking more than $300 million in damages.

Derek Henderson is the trustee in bankruptcy cases filed by Chris Evans of Madison County and his companies. Evans’ brother, Charles Evans, is a Jackson lawyer who handled title work for Mississippi Valley Title Co. in several of the land transactions alleged to be part of the fraud.

The FBI and U.S. attorney’s office are investigating the allegations. John Colette, the Evans brothers’ attorney in any possible criminal case, said no charges have been filed against either brother.

In his Jan. 27 complaint, Henderson alleges Charles Evans failed Chris Evans in several ways and is asking a judge to award $50 million in damages, in addition to punitive and special damages to be determined by the judge.

Tylvestor Goss, Chris Evans’ bankruptcy attorney, would not comment.

Henderson was ill Monday and could not be reached for comment. Judge Neil Olack has given Charles Evans, who is representing himself, until March 1 to respond to Henderson’s complaint.

In court documents, the brothers have been accused of getting multiple loans from various banks on individual properties, including a part of Highland Colony Parkway. Each bank believed itself to be the sole lienholder.

In his complaint, Henderson alleges Charles Evans failed to protect the assets of the companies and Chris Evans. Henderson also alleges Charles Evans allowed money and assets to be “commingled and misappropriated.”

In the filing, Henderson said Charles Evans should have known his actions were a breach that would harm his brother, the companies and their creditors.

Mississippi Valley Title issued policies insuring the accuracy of titles involved. At least $41 million in claims have been filed against Mississippi Valley Title and its parent company, Old Republic National Title Insurance Co.

Charles Evans has not filed bankruptcy, but he and his brother were both named in lawsuits filed by several banks.

After Chris Evans filed bankruptcy in October, more than 30 companies the Evans brothers set up or controlled also filed Chapter 7 bankruptcy.

Several banks in the case are asking the judge to lift the stay that prevents them from moving forward with the individual properties tied to their loans.
Henderson, however, has filed a motion asking the judge to allow him to sell the land on the open market.

I am in northwest Mississippi today–Nesbit to be exact–speaking to a group of real estate industry professionals about real estate and mortgage fraud prevention, helping distressed homeowners, and how to help investors make responsible foreclosure-related decisions. Today’s presentations are sponsored by the Northwest Mississippi Association of REALTORS® (NWMAR), and have attracted around 100 or so of NWMAR’s members from around the region.

In my first presentation of the day I spoke about how at the very beginning of this current mortgage meltdown of ours (and its resulting foreclosure epidemic), that I pointed out right here on FlippingFrenzy.com and elsewhere that the main cause of this mess was fraud. Most people who read or heard those early opinions of mine disagreed, including professionals in the real estate and mortgage loan industries, the media, and of course the politicians. Everyone thought the impending meltdown would have more to do with irresponsible borrowing on the part of consumer, the popularity of poorly conceived mortgage loan products, and a natural market correction in property values.

The truth was and still is today that fraud is and continues to be the primary root cause of this real estate and mortgage-driven economic mess.

Unfortunately, getting the real estate industry as a whole to admit to this fact is nearly impossible, but the folks here at the Northwest Mississippi Association of REALTORS® really seem to get it, while elsewhere, taken as a whole, the real estate industry has too much to lose by admitting the truth. After all, if fraud is a proven contributing factor to a borrower’s defaulting on the loan, the mortgage lender is required to buy the bad loan back from Fannie Mae, Freddie Mac, or the Wall Street Firms who sold the loan to investors (sound familiar Rock Financial and Quick Loans?). Fraud has been and continues to be so rampant that admitting the fact would lead to the mortgage banks having to buy back billions of dollars in bad loans, which they simply cannot afford to do.

Other topics being covered on today’s agenda include:

• The current state of foreclosure in the U.S.
• Recent legislative attempts to curtain real estate and mortgage-related fraud
• How to help homeowners before and during foreclosure
• How to assist investors and distressed homeowners through foreclosure-related investments

Over the course of my nearly 30 years as a real estate industry professional, I have turned over countless real estate files to multiple lenders only to have them tell me that they don’t view these fiels as having any fraud in them. When I send the exact same files to law enforcement authorities, they readily see the fraud, and they immediately open investigations. It’s obvious to me that some real estate industry insiders have no defense against fraud. If they admit to the fraud, they may have to buy back a loan. If they deny it, they have no reason to take steps to address the problem.

Nationally, the current state of denial about fraud is only making the problem worse. Until the real estate industry wakes up and admits to its problem, the fraudsters will be free to continue in their ways — approving bad loans to earn profits today with no thought of the future mess they’re causing.

Simply stated, the folks here in northwest Mississippi–guided by the Northwest Mississippi Association of REALTORS®–understand that the industry needs to clamp down and purge its hallways of the con artists and fraudsters and those who facilitate the fraud, tighten the standards for approving mortgage loans, and work with distressed homeowners to control the damage and the fallout from this mortgage mess.

In May of this year, the Mississippi Department of Banking and Consumer Finance notified all of the state’s mortgage license holders that, as of July 1, 2008, the state will be participating in the National Mortgage Licensing System (NMLS) and that participation for all of the state’s mortgage license holders is mandatory.

NMLS officially launched on January 2, 2008, and was the culmination of a four-year effort by state regulators and is just one part of a multi-faceted plan being implemented to enhance consumer protection, improve regulation, increase uniformity of mortgage supervision, and streamline the licensing process. These efforts include coordinated supervision, improved regulatory practices, and consistent standards for testing and training for mortgage originators; and uniform license application, renewals and annual reports. To accomplish this, Mississippi’s Department of Banking and Consumer Finance amended the Mississippi Mortgage Consumer Protection Law during the past regular session of the Legislature to mandate participation in NMLS.

At its core, NMLS is a state-based approach that has the benefits of localized accountability and an on-the-ground regulatory system combined with the efficiencies of a nationwide framework. This type of framework has the potential to create high and consistent regulatory standards without preempting states important role in the development of consumer protections and the enforcement of lending standards.

NMLS’ basic feature is a central database, containing a single record for every state-licensed mortgage lender,
broker, and branch and loan originator, based on the uniform mortgage application forms developed by state
regulatory agencies. It will also drive standardization and coordination among state regulators in areas such as
licensing requirements, background checks, testing and education, enforcement action, examinations and annual
reporting, which is bound to have a positive impact in the fight against real estate and mortgage fraud.

To date, 42 state agencies representing mortgage regulators in 40 states have indicated their intent to be a part of
NMLS. By the end of 2008 there should be 19 state agencies on the system with another 14 participating in 2009.
The remainder of the 42 agencies are expected to come online in 2010 and 2011. Total projected enrollment in NMLS will be more than 500,000 professional licensees. In Mississippi, the Department of Banking and Consumer Finance estimates its enrollment will be approximately 4,000 mortgage professionals.

The Connecticut Department of Banking and the Louisiana Office of Financial Institutions have issued announcements indicating their participation on NMLS starting July 1, 2008, also. Connecticut licensees have until September 30, 2008 and Louisiana licensees have until October 1, 2008 to transition their license(s) onto NMLS. Both agencies will begin accepting submissions through NMLS on July 1.

The Detroit News is reporting that a Grosse Ile, MI, man has filed a class-action lawsuit against 17 companies and individuals, alleging he was the victim of real estate fraud based on grossly inflated residential property appraisals. Blaise Repasky, who The Detroit News says filed suit last Friday in U.S. District Court in Detroit, alleges that he purchased eight Detroit area homes in 2004 at a total cost of $940,000 but later learned that the true value of the homes totaled just $393,150. Click here for The Detroit News article.

A Dallas, TX, television station is reporting that a local man stands accused of running a mortgage fraud scheme that involved a home once owned by a popular ex-Dallas Cowboy football player. According to Dallas’ CBS 11 News, Oltha Austin, Jr. is wanted on suspicion of committing mortgage fraud. Apparently, Austin forged his mother’s name on a loan application and falsely claimed that she had a trust fund worth an estimated $6,000,000. Click here for the entire story.

From HattiesburgAmerican.com: “Richard Lucas, the alleged ringleader in a mortgage fraud case, was jailed Friday afternoon on a federal court order. Lucas, 31, was booked into Forrest County Jail about 1:10 p.m. Friday and remained there today. He and nine other people face federal charges of bank fraud, wire fraud and conspiracy to commit bank and wire fraud in connection with a so-called mortgage flipping scheme. During a March 1 hearing, U.S. Magistrate Robert H. Walker ordered Lucas to report to Clearview Recovery Center for drug treatment as soon as a bed was available and to maintain communication with federal probation officers. He had ordered Lucas to undergo a drug assessment as part of a pre-trial release agreement. It was not clear today why Lucas was ordered jailed.”

From The Chicago Tribune: “Federal authorities said Friday that a banker who fled the country after being indicted for mortgage fraud arranged for the wire transfer of $800,000 to accounts he controlled in Switzerland and Dubai shortly before he was charged. Fugitive banker Michael Kakvand was arrested in December in Canada, returned to Chicago but now wants to be released on bail. His lawyer, Edward Genson, is arguing that he is not a flight risk. U.S. District Judge William Hibbler has scheduled further hearings on the issue. FBI agent Jay Hagstrom testified Friday that Kakvand was secretly and illegally tape-recorded by a one-time co-worker while he was on the run. In one recorded conversation, Kakvand tells the worker: “I am sure from the bottom of my heart I have not done something terribly wrong.” Prosecutors contend that Kakvand was part of a ring that engaged in a $29 million mortgage fraud scheme.”

As I reported on February 3rd, as well as on the February 23rd, Real Estate Fraud is booming in Canada. Click here for an excellent article from the Saskatoon StarPhoenix on just how serious the problem has become.

Finally, the Atlanta Business Chronicle is reporting that a husband and wife team have been sent to prison and ordered to pay more than $2.5 million in fines for mortgage and bankruptcy fraud. According to the Atlanta Business Chronicle, Hurb Grant was sentenced last week by a U.S. District Judge to three years in prison and ordered to pay $1.3 million restitution for bankruptcy fraud related to a scheme to retain fraudulently acquired properties, while his wife, Jennifer, was sentenced in January to five years in prison and ordered to pay $1.3 million restitution. Click here for the Atlanta Business Chronicle’s article on Hurb and Jennifer Grant.