Multi-Million Dollar Mortgage Fraud Scheme Verdicts – GUILTY! Austin, Texas Jury Finds Five Guilty

March 31, 2008

Every choice has a consequence. The rampant spread of mortgage fraud is no different. Unethical practices and outright blatant fraud brought a guilty verdict to several Texas area individuals.

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  • Cornelius Robinson, age 47, of Austin, Texas, who was the leader and organizer of the fraud scheme. Robinson was convicted of conspiracy to make false statements related to a loan, conspiracy to commit wire fraud, five substantive counts of wire fraud, 9 substantive counts of false statements related to a loan, one count of aiding and abetting the receipt of commissions or gifts from loans by a bank employee, conspiracy to commit money laundering and 7 substantive counts of money laundering.
  • Michael Breon, age 39, formerly of Austin and a current resident of McKinney, Texas, and a straw purchaser. Breon was convicted of conspiracy to make false statements related to a loan, one count of wire fraud and one count of conspiracy to commit money laundering. Breon, a licensed loan officer and mortgage broker, was employed by several different loan origination and mortgage companies during the conspiracy.
  • Sindu Sukumaran, age 36, wife of Michael Breon and a straw purchaser. Sukumaran was convicted of wire fraud.
  • Marlon Nathan Torres, age 45, of Hutto, Texas, a licensed real estate agent and buyer and seller of real estate in the Austin area. Torres was convicted of one count each of conspiracy to commit money laundering and money laundering.
  • Jeffrey Andre Wilkins, age 46, of Austin, a cousin of Cornelius Robinson and a straw purchaser. Wilkins was convicted of one count each of conspiracy to make false statements related to a loan, conspiracy to commit wire fraud, false statement related to a loan, conspiracy to commit money laundering and money laundering.

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Eleven co-defendants plead guilty to other mortgage fraud related charges. They are:

  • Silvia Seelig, age 45, of Austin, and wife of Cornelius Robinson who during the conspiracy, was a licensed real estate agent and a straw buyer;
  • George H. Watson, age 55, of Austin, a licensed attorney who specializes in real estate transactions. Watson served as the closing attorney on most of the real estate transactions described in the Indictment;
  • James Douglas Atwood, age 51, of Austin, Cornelius Robinson’s uncle and a straw buyer;
  • Doris Ann Hill, age 40, of Austin, a personal banker employed at Wells Fargo Bank. For a fee, Hill agreed to provide a false verification of deposit to loan underwriters in relation to three real estate transactions involving defendant Snead;
  • Julius Meyers Lofton, a 45-year-old licensed real estate agent living in Austin and a straw buyer;
  • Roy Rivers, age 52, of Austin, and a straw buyer;
  • Danielle Guice Rosas, age 40, of Austin, and a straw buyer;
  • Stanley Ma, age 27, of Honolulu, Hawaii and a straw buyer;
  • Leonard Brown, age 38, of Houston, Texas, who provided a false verification of employment in association with Onyx Consulting and defendant Ma;
  • Russell Snead, age 43, of the Seattle, Washington area and a straw buyer; and,
  • Leroy Williams, age 46, of Austin and a straw buyer.

According to the US Attorney’s office: From September 1999 to present, the defendants participated in a scheme to defraud mortgage lenders, including federally insured financial institutions, with regard to loans acquired to purchase 25 properties in the Austin and San Antonio area. The scheme centered upon the use of real estate “flips.” That is, the defendants purchased property at one price and would immediately sell, or “flip,” the property to a “straw buyer” at a higher price. In doing so, the mortgage lenders were deceived as to the true nature of the transaction and the financial status of the “straw buyer.” The straw buyers did not make the subsequent monthly mortgage payments
and all of the loans have gone into default. All of loans have been either foreclosed upon or are the subject of current foreclosure proceedings.

As previously reported on this blog – The Mostly Texas Sixteen have now seen the indictment turn into either guilty pleas or guilty verdicts. My guess is that most will face active prison sentences with the longest sentence being reserved for Cornelius Robinson who I suspect will face 10+ years – perhaps longer.

Every choice has a consequence. As a white collar crime and mortgage fraud speaker, I speak from first hand experience about the truth about consequences. Reality is – no one escapes the consequences of their choices. While Robinson and others may have avoided the consequences of their actions for a time, they did not avoid the consequences all together. One thing is for sure, you do reap what you sow.

As those who pleaded guilty will be sentenced on June 6th and those just found guilty will be sentenced on June 20th – they will soon know just what their fraudulent actions will bring to them in the form of prison consequences.

If anyone reading has any background on Robinson – feel free to comment as I study the behaviors and backgrounds of those who are accused of unethical conduct and white collar crime.

White Collar Crime and Business Ethics Speaker – Chuck Gallagher – signing off…