Nine indicted for Foreclosure fraud

A statewide grand jury in Colorado has indicted nine individuals for targeting distressed homeowners as part of an alleged fraudulent short-sale scheme that allowed the defendants to ultimately defraud the banks and lenders who held the mortgages for the distressed homeowners, officials announced today.

Eight of the nine named defendants are being charged under the Colorado Organized Crime Control Act for a pattern of manipulating homeowners who were facing foreclosure, creating and processing forged and fraudulent documents relating to the properties, and ultimately using these forged documents and other actions to defraud the lenders and subsequent buyers.

The announcement was made by Colorado Attorney General John Suthers; Ronald Sloan, Director of Colorado Bureau of Investigation; Inspector General David Montoya of the U.S. Department of Housing and Urban Development-Office of Inspector General; Acting Inspector General Michael P. Stephens of the U.S. Federal Housing Finance Agency-Office of Inspector General, and Marcia Waters, Division Director of the Colorado Division of Real Estate.

“It is unconscionable that this group would target financially distressed and vulnerable homeowners by fraudulently taking control of and selling their properties, with the ultimate goal of defrauding the homeowners’financial institutions and the subsequent homeowners.” Suthers said.

“Nine indicted for fraud by fraudulently taking control of and selling their properties, with the ultimate goal of defrauding the homeowners’ financial institutions and the subsequent homeowners,” Suthers continued. “This group took advantage of multiple homeowners, using deception and forged documents, to create illegal profits on the sale of various properties.”

The basic premise of the scheme focused on identifying distressed homeowners who were in pre-foreclosure status.

Once a property was zeroed in on by members of this scheme, the goal was to obtain control and ownership over the property through a series of deceptive tactics.

These tactics included manipulating the homeowners to sign over ownership and control of the property to the enterprise. At the same time, the enterprise would file forged paperwork with the lenders misrepresenting that the original homeowners still owned the house. Another tactic used in support of the scheme was the enterprise’s “flopping”of the pre-foreclosed properties.

“The Colorado Bureau of Investigation is committed to combating organized white collar crime including schemes such as this short sale mortgage fraud scam,” said CBI Director Ronald Sloan. “While fraudulent schemes continually evolve, we believe active monitoring and investigation, along with aggressive prosecution that holds offenders accountable for their actions, combined with efforts to educate the public, will result in fewer victims in the future.”

“The nine individuals named in this indictment have allegedly committed fraud against individual victims and Fannie Mae and Freddie Mac,” said Acting Inspector General Michael P. Stephens. “This behavior is unacceptable and anyone found guilty will be held accountable to the full extent of the law.”

Wendy Thomas, 42, of Chicago, previously of Thornton; Cristina Nicole Smith, 42, of Thornton, Kurt Smith, 58, of Thornton; Sheila Gaston, 59, of Elizabeth; Sheila Giberti, 46, of Broomfield; Duane Thomas, 44, of Thornton; Christopher Consol, 43, of Englewood; and Janice Gardner, 46, of Brighton, were charged with multiple offenses, including violating the Colorado Organized Crime Control Act. Under COCCA, if convicted, each could be sentenced up to 24 years per count.

 

The best resource available to consumers facing foreclosure, according to the attorney general’s office, is the Colorado Foreclosure Hotline, which can be reached at 1-877-601-HOPE (4673).