Mcfarland Superceding Indicment
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s - s IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA DEC 14 2004 ATLANTA DIVISION LUTHER D. 1Cln k W-' Uw~IS`~C Ie UNITED STATES OF AMERICA CRIMINAL INDICTMENT V . NO . 1 :44-CR-224-TWT CHALANA C . MCFARLAND, (Superseding) THE GRAND JURY CHARGES THAT : COUNT 1 (Conspiracy) 1 . Between in or about mid 1999 and in or about late 2002, in the Northern District of Georgia, and elsewhere, defendant CHALANA G . MCF'ARLAND did willfully, knowingly and unlawfully combine, conspire, confederate, agree and have a tacit understanding with Brenda G . Brown, Lisa R . Bellamy, Judith' H . "Judy" Hooper, a/k/a Jerry Dale Hunter, Lupita McCarthy, Melvin Howard Quillen,, Thomas Christopher Davis, Sr ., Brandon G . Wilhite, Qmar Rashad Turral, Renee Meeks, Latonia Cromartie, Melinda Renee Tyner, a/k/a Little Renee, James Patterson, Jewel Williams, Sidney Williams and others, known and unknown, to commit. certain offenses against the United States, including the following : (a) To knowingly execute and attempt to execute a scheme and artifice to defraud insured depository financial institutions, as defined in Title 18, United States Code, Section 20, by knowingly submitting and causing to be submitted materially false qualifying information and documentation and other fraudulent representations to obtain mortgage loans from banks, in violation of Title 18, United Stakes Code, Section 1344 . (b) To devise a scheme and artifice to defraud mortgage lenders by submitting and causing to be submitted materially .false qualifying information and documentation and other fraudulent representations to obtain mortgage loans, causing the Postal Service and other interstate carriers to be used and interstate wire transfers to be made to fund said loans and for other purposes, in furtherance of said scheme and artifice to defraud, in violation of Title 18, United States Code, Sections 1341 and 1343 . (c) To, with intent to deceive, falsely represent and cause to be represented certain social security numbers for the purpose of obtaining for the defendant, her co-conspirators and others fraudulently derived loan proceeds and far other purposes, in violation of Title 42, United States Code, Section 408 (a) (7? (B) . (d) To knowingly and without lawful authority cause to be transferred and used a means of identification of another person, including their name and social. security number, with intent to commit the federal felony offenses of wire fraud, mail fraud and bank fraud as further described in paragraphs 1(a) and I (b) , 2, 3, and 4 of Count 1 and in Counts 2 through 93 of this Indictment, in violation of Title 18, United States Code, Section 1028(a)(7) . 2 ! k (e) To knowingly conduct and . attempt to conduct financial transactions which involved the proceeds of specified unlawful activity, that is, acts indictable under Tithe 18, United States Code, Sections 1341, 1343, and 1344, being mail fraud, wire fraud and bank fraud as further described in paragraphs 1(a) and 1 (b) , 2, 3 and 4 of Count 1 and in Counts 2 through 92 of this Indictment, knowing that the property involved in the financial transactions represented the proceeds of some form of unlawful. activity with the intent to promote the carrying on of the specified unlawful activity, and knowing that the transactions were designed in whole and in part to conceal and disguise the nature, location, source, ownership and control of the proceeds of the specified unlawful activity, in violation of Title 18, United States Code, Sections 1956 (a) (1) (A) (i) and (B)(i) . (f) To knowingly engage in monetary transactions in the United States which affected interstate commerce, involving criminally derived property of a value greater than $10,000, that was derived from specified unlawful activity, that is acts indictable under Title 18, United States Code, Sections 1341, 1343 and 1344, being mail fraud, wire fraud and bank fraud as further described in paragraphs 1(a) and 1(b), 2, 3, and 4 of Count l and in County 2 through 92 of this Indictment, in violation of Title 18, United States Code, Section 1957 . 3 (g) To corruptly influence, obstruct and impede the due administration of justice, and endeavor to do so, by causing records, documents and items subpoenaed for production before a Grand Jury of the United Sates to be concealed and destroyed and by providing false and misleading affidavits and information about said subpoenaed records ; documents and items, in violation of Title 18, United States Code, Section 1503 . 2 . At time relevant to this conspiracy ; (a) Defendant CHALANA C . MCFARLAND owned and operated The McFarland Law Firm located first at 4820 Redan Road, Sane Mountain, Georgia, and later at 900 North Hairston Road, Stone Mountain, Georgia . Defendant MCFARLAND acted as agent fox property title insurance companies, including First American Title Insurance Company/Attorneys' Title Guaranty Fund and Old Republic National Title Insurance Company, and was the closing attorney for various lenders . Defendant MCFARLAND caused HUD-1 Settlement Statements (HUD-1s) to be signed certifying that she received and disbursed loan proceeds and borrower down payments as reflected on the HUD-1s when she closed mortgage loans for various lenders on the properties fox which she caused title policy commitments and title insurance to be written . At times during the course of this conspiracy, defendant MCFARLAND was assisted by co-conspirators described as follows, bud not named as defendants herein . 4 (b) Brenda G, Brown and Lisa R. Bellamy were paralegals employed by defendant CHALANA C . MCFARLAND at The McFarland Law Firm . (c) Judith H . "Judy" Hooper was a former mortgage broker who changed her identity to Jury Dale Hunter and arranged for lawns to be originated through the mortgage brokerage firm, American Mortgage Exchange, before she left the United Stakes in the summer of 2000 . (d) Renee Meeks, Melinda Renee Tyner, a/k/a "Little Renee," Latonia Cromartie, James Patterson and other co- conspirators originated and processed mortgage loans for American Mortgage Exchange, Smart Choice Mortgage and other brokers . (e) MeZvin Howard Quillen was a borrower, recruited other straw borrowers and provided shell company names to use as employers to qualify said borrowers for mortgage loans . (f) Lupita McCarthy was a former mortgage broker who recruited straw borrowers, managed properties and provided shell company bank accounts to receive and disburse mortgage loan proceeds . (g) Oman Rashad Turral sold pharmacy student names, social security numbers and identities obtained, from a Florida university for use as borrowers on loans . (h) Brandon G . Wilhite, JFP and KEC appraised a number of the properties for the lawns originated by American Mortgage 5 C . Exchange and other companies and closed by defendant CHA,LANA MCFARLAND . (i) Jewel Williams and Thomas Christopher Davis, Sr ., by were real estate agents on a number of the loans originated American Mortgage Exchange and closed by defendant CHALANA C . MCFARLAND . Jewel Williams was assisted by her husband, Sidney Williams, a former mortgage broker . 3 . It was a part of the conspiracy and the objects thereof for the defendant and her ca-conspirators : (a) To contract or otherwise arrange far the purchase of residential properties primarily in the Mountain Oaks, North Shore, Southland and Waters Edge Subdivisions located in Lithonia and Stone Mountain, Georgia and other residential properties including those in the Atlanta, Clarkston, College Park, Decatur, Douglasville, Elberton, Fairburn, Fayetteville, Griffin, Riverdale and Snell.ville, Georgia area for resale at artificially inflated prices, often using the proceeds of the resale to pay for the initial purchase, a practice commonly referred to as "flipping ." (b) To recruit, pay or otherwise induce co-conspirators, commonly referred to as "straw sellers," or locale identities to use as "straw sellers," to falsely claim current ownership of the properties referenced in paragraph 3(a) of Count 1 of this Indictment for the purpose of selling the properties and, thereafter, to list the straw sellers on the HUD-1 Settlement 6 b a Statements to close the purchases at lesser amounts than that for which the properties just sold with a portion of the loan proceeds ; or to obtain inflated loan proceeds without use of straw sellers by persuading true sellers to increase the sales price on their Purchase and Sale Agreements and return that increased amount upon negotiation of their settlement check or allow that amount to be, removed from loan proceeds through disbursements for purported repairs ." (c) To recruit, pay or induce other co-conspirators, commonly refereed to as "straw borrowers," for use of their identity to submit documents containing false qualifying information including income, employment, assets, liabilities and/or residence to banks and mortgage companies to obtain mortgage loans and, on a few occasions, Housing and Urban Development ("HUD") insurance . (d) To, on occasion, use the identities of other people as straw sellers and straw borrowers for the purpose of fraudulently obtaining mortgage loan proceeds . (e) To falsely represent that required down payment amounts were paid from borrower funds . (f) To falsely represent that the property would be the primary residence of the straw borrowers . (g) To use shell, "air" or other companies of the defendant, her co-conspirators and their fiends and family to 7 r falsify straw borrower employment and to receive scheme proceeds from the defendant's law firm . (h) To pay and otherwise reward bank employees for providing false and misleading Verifications of Deposit . ( i ) To sign ghost or fake names as loan officers and processors of American Mortgage Exchange, the mortgage brokerage firm originating many of these fraudulent loans . (j} To witness, notarize and submit to the lenders purported signatures of straw sellers and straw borrowers who neither attended closings nor signed the closing documents . (k) To falsely represent t0 lenders that the defendant closing attorney was present and conducted all mortgage loan closings for which she signed, and caused the HUD-1 Settlement Statements to be signed .