A Virginia man and woman will each spend two years in prison for leading a scheme that recruited straw buyers into a multi-year, multi-property mortgage fraud scheme that defrauded 10 different lenders.
Jerrold Fowler, 31, of Virginia, was sentenced by U.S. District Court Judge Richard Stearns to two years in prison, three years of supervised release, and ordered to pay restitution of $3,786,815 and to forfeit $7,413,712.
In June 2015, Fowler pleaded guilty to one count of wire fraud and one count of bank fraud.
Thursa Raetz, 40, of Virginia, was sentenced by Judge Stearns to two years in prison, three years of supervised release and ordered to pay restitution of $3,099,224 and to forfeit $7,413,712.
In June 2015, Raetz pleaded guilty to two counts of wire fraud and one count of bank fraud.
According to court documents, between Sept. 2006 and April 2008, Michael David Scott, a former real estate developer, arranged to purchase multi-family residences in Roxbury and Dorchester, Massachusetts and then sold individual condominium units in the buildings to straw buyers recruited by him and his co-conspirators, Fowler and Raetz.
Scott, Raetz, and Fowler recruited the straw buyers with promises that they would not have to make down payments, pay any funds at the closing, or be responsible for mortgage payments, and with assurances that they also would share in profits when the units were resold, the Department of Justice said in an announcement.
According to the DOJ, in order to obtain mortgage loans in the names of the straw buyers, Scott, Raetz, and Fowler submitted false mortgage loan applications that misrepresented key information, including the buyers’ income, personal assets, down payment, and intention to reside in the condominiums.
The mortgage lenders (nine national mortgage companies and one local Massachusetts bank) were led to believe that the straw buyers had made substantial down payments and paid substantial sums at closings, the DOJ said.
On Nov. 12, 2015, Scott, who also pleaded guilty to charges arising out of his role in the scheme, was sentenced to 135 months in prison, five years of supervised release and ordered to pay restitution of $11,374,201 and to forfeit $7,413,712.