An Alabama man was sentenced to 17 years in prison for conspiring to defraud financial institutions and launder stolen funds as part of a $15 million, multi-state mortgage fraud scam that ended with the attempted murder of a witness against him.
Kinard Henson, 43, Ventress, Alabama, used phony documents and straw buyers to make illegal profits on overbuilt condos, court records show.
The defendant previously pleaded guilty before U.S. District Judge Jerome B. Simandle to a second superseding indictment charging him with one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering and one count of attempted murder of a witness in a federal case.
Henson was among 11 defendants charged in July 2012 with conspiracy to commit wire fraud and conspiracy to commit money laundering. Henson’s conspirators located oceanfront condominiums overbuilt by financially distressed developers and negotiated a buyout price with the sellers.
They then caused the sales prices for the properties – located in Wildwood Crest and North Wildwood, New Jersey, other locations in New Jersey and in Naples, Florida – to be much higher than the buyout price to ensure large proceeds. Other defendants helped conceal the true sales prices of certain properties through inflated sales contracts and sale and finder’s fee agreements.
Henson and others recruited straw buyers to purchase certain properties at the inflated rates. The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans. The conspirators created false documents, such as fake W-2 forms, pay stubs, bank statements and investment statements, to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.
Henson’s conspirators also caused fraudulent mortgage loan applications in the name of the straw buyers, including the supporting documents, to be submitted to mortgage brokers that the brokers knew were false.
Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings, Henson received a portion of the proceeds after his conspirators had funds wired or checks deposited into various accounts they controlled.
Henson learned of a subpoena seeking documents in connection with a straw buyer’s purchases of real estate properties shortly after it was served by federal law enforcement agents on a mortgage brokerage firm.
Henson, who had recruited the straw buyer, contacted another individual to kill the straw buyer. They then lured the straw buyer to a wooded area in Mobile, Alabama. At Henson’s direction and using Henson’s firearm, the other individual shot the straw buyer multiple times. The buyer survived.
In addition to the prison term, Judge Simandle sentenced Henson to serve five years of supervised release.