A recent Federal sentence shows that courts will deal harshly with those that broke the law in housing and mortgage fraud.
Winston Shillingford,56, and His wife Marleen Shillingford, 47, were recently sentenced by a Federal Judge in Connecticut in relation to a Mortgage Fraud scheme. The couple will spend four years and three years in jail respectively, with Winston serving the longer term.
For multiple years the Shillingford’s, through their Waikele Properties Corp., conspired with others to commit mortgage fraud and a money laundering scheme. They obtained false mortgages to purchase more than 40 multi-family units and vacant properties, where they built new homes in Bridgeport, Connecticut. Waikele Properties had offices in Bridgeport and Garden City, New York.
The mortgage fraud scheme involved the couple recruiting straw buyers who purchased the properties. Some of the mortgages were obtained through TARP banks such as Bank of America. The loan applications that were filed on behalf of the straw purchasers contained false information such as the buyers’ employment, income, assets, and liabilities. These fraudulent loan applications were then forwarded by wire to the lender who then provided the loan based upon their misrepresentations. Many of the homes were never occupied and ended up in foreclosure. The Shillingford’s and others stole the loan proceeds when the money was wired to the company. The charges they were sentenced upon included conspiracy to commit wire fraud and conspiracy to commit money laundering.
This Mortgage Fraud case was jointly investigated with Special Inspector General for the Troubled Asset Relief Program (SIGTARP) as well as the U.S. Attorney for the District of Connecticut, FBI, and HUD-OIG. SIGTARP was created in 2009 as a white collar investigative agency for civil and criminal enforcement actions against those who steal TARP funds. SIGTARP partners with law enforcement agencies to investigate and prosecute TARP activities including mortgage fraud, bank fraud, securities fraud, insider trading, tax fraud, money laundering, wire fraud, obstruction of justice and others. Currently SIGTARP has 150 ongoing criminal and civil investigations. A listing of public cases as well as hotline information can be found at www.sigtarp.gov.
Christy Romero, Special Inspector General for TARP stated about the above case, “The Shillingford’s scheme is a perfect example of the behavior and the degree of greed and narcissism that contributed to our nation’s housing crisis.” Outlining the fraud she stated, “The Shillingford’s gobbled up real estate, recruited straw buyers to purchase the properties, and helped purchasers obtain mortgage loans for the properties from banks by falsifying information on their loan applications and submitting fraudulent documents, including fake pay stubs, bank records, and employment verification forms from fictitious employers.”