Charles E. Walker, 56, owner and president of the Charles E. Walker Realty in Springfield, Missouri was indicted by a federal grand jury December 16, 2009 along with 16 other people on 52 counts related to mortgage fraud conspiracy.
Also indicted with Walker were his wife Lind, his son Lee, five real estate agents at the realty, three mortgage brokers, two real appraisers and four investors.
Federal agents raided the Walker Realty three years ago after their investigation revealed that Walker and co-defendants inflated home values defrauding lenders and submitting false loan applications totaling nearly $11 million dollars.
Don Ledford, spokesman for the U.S. attorney’s office for western Missouri, said he could not provide details of the investigation because of the lengthy process of the paperwork.
“When you have this kind of financial crime, there is quite a bit of paperwork to be investigated and evaluated,” he said. “That takes time.”
A news release from the U.S. attorney outlined alleged fraud that involved 26 residential properties between Nov. 1, 2004, and June 30, 2006. The allegations include the following:
Investors, some of whom were real estate agents at Walker Realty or mortgage brokers, bought and resold homes among themselves to increasingly inflate the property values.
Walker Realty and its agents received commissions for many of those transactions.
Potential home buyers represented by Walker Realty were told they could receive substantial funds at the time of closing under the guise of repair costs or remodeling, which they could use for their personal benefit if they agreed to buy the homes at inflated prices.
Defendants Vincent Cantrell, 40, and Charles V. Pursley, 82, submitted inflated appraisals on the properties to support inflated prices.
Mortgage brokers William Wagoner, 56, Steve Casarez Jr., 32, and Juan A. Johnson, 41 — all named as defendants — reportedly facilitated the scheme by giving lenders false information about borrowers’ actual income, assets and liabilities. They also concealed the fact that portions of the loan proceeds would be remitted to the borrowers after closing.
Knowing the applications contained false information and omitted material facts, the borrowers signed and approved the loan applications. Some of the borrowers were indicted.
In some cases, Charles Walker, his agents and investors provided temporary loans to borrowers for down payments, with the understanding they would be paid back from future loan proceeds. Such information was not disclosed to lenders.
The loan applications also falsely reflected that the properties were purchased as the borrower’s primary residence rather than for investment purposes.
The loan proceeds totaled about $10,944,023, and the defendants pocketed $4.3 million, prosecutors alleged.
More than 20 of the 26 homes have since been foreclosed on, causing financial losses to the lenders, said Ledford.
In addition to the 26 mortgage fraud cases in which Charles and Linda Walker are charged, the federal indictment also alleges that:
- Lee Walker engaged in seven fraudulent real estate transactions totaling about $3,080,229.
- Frankie R. Powell, 67, a Walker Realty agent and an investor, engaged in nine fraudulent transactions totaling about $3,272,771.
- James H. Powell, 71, an investor, engaged in eight fraudulent transactions totaling about $4,197,139.
- Wagoner, a mortgage broker and an investor, prepared and submitted nine loan applications for himself and on behalf of other borrowers totaling about $2,578,531.
- Casarez, a mortgage broker and an investor, prepared and submitted five loan applications for himself and on behalf of other borrowers totaling about $2,345,588.
- Johnson, a mortgage broker, prepared and submitted nine loan applications for himself and on behalf of other borrowers totaling about $3,104,265.
- Eddie Lee Rohrs, 37, an investor, bought and sold four properties through Walker Realty at artificially inflated prices totaling about $2,416,919.
- Christopher Forrester, 29, an investor, bought and sold one property through Walker Realty at an artificially inflated price of about $1,501,595.
- Robert C. Barnica, 35, an investor, bought and sold two properties through Walker Realty at artificially inflated prices totaling about $1,006,015.
- Jess Kevin Cypret, 51, an investor, bought and sold two properties through Walker Realty at artificially inflated prices totaling about $536,096.
- Linda D. Hanks, 38, a Walker Realty agent and an investor, bought one property from Lee Walker at an artificially inflated price. In exchange for her purchase, Hanks received $91,145 from Walker after closing, which she did not disclose to the mortgage lender.
- Tammy R. Fedel, 53, purchased two properties through Walker Realty at artificially inflated prices, totaling about $672,648. In exchange for her purchases, Fedel received from the sellers after-closing payments, which she did not disclose to the mortgage lender.
- Laura Greer, 41, purchased, and later refinanced, one property from her father James Powell, also an investor, at an artificially inflated price.
In exchange for her purchase, Greer received after closing from James Powell $226,718, which she did not disclose to the mortgage lender.