Mortgage

Baltimore accountant pleads guilty for role in $1.4M mortgage fraud scheme

Recruited straw buyers, defrauded mortgage lenders

A Baltimore-area account pleaded guilty earlier this week to charges stemming from his role in a mortgage fraud scheme that used straw buyers to purchase seven properties in Baltimore, resulting in losses of more than $1.4 million.

According to the United States Attorney’s Office for the District of Maryland, Cecil Sylvester Chester, age 68, helped to recruit straw buyers to purchase properties owned by a co-conspirator, Andreas Tamaris, purchased, renovated, and then resold distressed row houses in Baltimore City.

According to his guilty plea, from February 2008 to July 2009, Chester and his co-conspirators, found buyers for Tamaris’ properties and for other property owners.

Chester persuaded several people that were inexperienced with residential real estate transactions and who lacked the funds needed to pay the down payment and closing costs to purchase Baltimore row houses either owned by Tamaris or identified by the conspirators.

Chester advised these “straw purchasers” that they didn’t need to contribute money for the down payment or closing costs to buy these properties.

Chester also advised that he would place tenants in the properties whose rent payments would cover the monthly mortgage payments after the transactions closed, and that Chester would collect the rent and make the mortgage payments.

According to the U.S. Attorney, Chester and his co-conspirators set the purchase price for the properties to far beyond their actual fair market value, generating excess money from the transactions that they kept for themselves.

The conspirators also provided false information about the straw purchasers’ employment, income and financial assets, as well as fraudulent supporting documentation to the mortgage loan brokers to enable the straw purchasers to qualify for home mortgage loans.

The conspirators falsely indicated to the mortgage loan brokers that the straw purchasers each intended to use the property as their primary residence following the purchase.

Tamaris and other individuals supplied the funds needed for the down payment and closing costs on each of the transactions, and were in turn reimbursed from the loan proceeds at settlement.

Chester brought the straw purchasers to the closing, and then coerced the straw purchasers to falsely sign certifications in the closing documents affirming that they intended to use the properties as their primary residence and that no portion of the down payment and closing costs were borrowed. 

Following the settlement on each transaction in which they participated, Chester and the other conspirators received substantial payments drawn from the proceeds of the loan.

According to court documents, few, if any, payments were actually made towards the mortgages.

All of the seven properties which Chester was involved in the purchase of went into foreclosure, resulting in a loss of at least $1,482,207.

Chester faces a maximum sentence of 30 years in prison and a $250,000 fine for conspiring to commit wire and mail fraud, and for wire fraud.

Tamaris, age 44, of Bel Air, Maryland, previously pleaded guilty to one count of conspiracy to commit mail and wire fraud and is scheduled to be sentenced on Sept. 27, 2016.

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