Weekly Real Estate News
Summary
Four people were indicted in North Texas in an alleged $7.3 million mortgage fraud scheme involving more than 20 loans and fabricated borrower documents, with FHA insurance claims already exceeding $493,499.
Federal prosecutors in North Texas have charged four people in an alleged multiyear mortgage-fraud scheme that they say used fabricated employment, income and bank records to obtain more than 20 home loans totaling approximately $7.34 million.
A federal grand jury returned the indictment Sept. 16 against Shawna Randall, also known as Shawna Porter; Cleophus Turner; Julie Shoumbert; and Maurice Gardner, according to the U.S. Attorney’s Office for the Northern District of Texas. Prosecutors announced the charges Monday.
All four defendants are charged with conspiracy to provide false statements to a mortgage lending business. Randall and Turner also face three counts of fraud and false statements, the Justice Department said.
The allegations have not been proven. An indictment is an accusation, and each defendant is presumed innocent unless and until proven guilty in court.
Prosecutors allege fabricated borrower files
The indictment describes a scheme built around documents that mortgage underwriters rely on to establish whether a borrower qualifies for a loan. Prosecutors allege Randall recruited borrowers who did not qualify and prepared, or directed others to prepare, fraudulent W-2 forms, pay stubs, verifications of employment and bank statements.
Randall worked for a real estate broker, according to prosecutors, who said her real-estate license was inactive during the alleged conspiracy.
Turner was a mortgage loan officer at Verity Mortgage. The government alleges he submitted falsified documents with loan applications while knowing the information had been fabricated or altered. Shoumbert and Gardner allegedly produced falsified bank statements at Randall’s request that were then submitted to Eustis/Verity Mortgage as part of borrower qualification files.
The Justice Department says the alleged conduct affected loans in Texas and Oklahoma and resulted in more than 20 fraudulent home loans totaling approximately $7,339,699.
FHA insurance claims are part of the case
The case is particularly relevant to government mortgage programs. Prosecutors said the U.S. Department of Housing and Urban Development has already paid partial FHA insurance claims exceeding $493,499 in connection with the allegedly fraudulent loans.
The investigation was conducted by the inspectors general for HUD, the Department of Veterans Affairs and the Federal Housing Finance Agency. Assistant U.S. Attorney Chad Meacham of the Fraud Section is prosecuting the case.
Those agencies’ involvement underscores the potential consequences when false borrower documentation enters federally backed or insured mortgage channels. Income, employment and asset verification sit at the center of mortgage underwriting, and fabricated records can expose lenders, insurers and ultimately taxpayers to losses when loans fail.
Potential penalties
If convicted, Randall and Turner each face up to five years in federal prison on the conspiracy charge and up to 30 years on each of the three false-statement counts, according to the U.S. Attorney’s Office. Shoumbert and Gardner each face up to five years on the conspiracy charge. Prosecutors also said fines and forfeiture may apply.
Those are statutory maximums, not predictions of any eventual sentence. Sentences in federal cases are determined by a judge after considering the facts, applicable statutes and federal sentencing guidelines.
For mortgage professionals, the case is a reminder that fraud controls do not end with automated underwriting. The allegations center on source documents that can appear facially legitimate inside a loan file. The case will now move through federal court, where prosecutors will have to prove the charges beyond a reasonable doubt.
