11/07/2008

News / MORTGAGE BROKER INDICTED IN MILLION DOLLAR MORTGAGE FRAUD SCHEME

(HOUSTON)-Clarence Lewis III, 45, a broker operating Motown Mortgage Group, has been indicted and charged with conspiracy, wire fraud and money laundering arising from an alleged scheme to defraud residential mortgage lenders, United States Attorney Don DeGabrielle and FBI Houston Special Agent in Charge Andrew R. Bland III announced today.

The seven-count indictment was returned under seal by a Houston federal grand jury on Monday, Oct. 27, 2008. The indictment was unsealed today following Lewis' arrest by investigating agents at his Houston area residence. Lewis is expected to remain in federal custody pending an appearance before a U.S. Magistrate Judge on Thursday, Nov. 6, 2008, at which time the issue of bond is expected to be decided.

"The FBI remains committed to continuing its efforts to vigorously address mortgage fraud and ensure that the strength and integrity of the nation's financial sector are sustained, Bland said. "Moreover, it is imperative that those who engage in this pernicious crime, and thereby undermine the economic vitality of our communities, are held fully accountable for their actions."

The conspiracy count of the seven-count indictment alleges that between January 2002 through January 2007, Lewis conspired with others and engaged in a mail and wire fraud conspiracy which fraudulently induced lenders to fund more than $12 million in residential mortgage loans. Lewis is accused of recruiting individuals to purchase residential properties with the intent to deceive mortgage lenders concerning the borrower's ability and incentive to repay the loans. Falsified documents were prepared and provided to the mortgage lenders, according to allegations in the indictment, to support loan applications. Property appraisals used as evidence of the value of the properties purchased were allegedly created by someone other than the licensed appraiser, and the licensed appraisers name and license were fraudulently used. Proceeds from the fraudulently obtained loans were deposited into bank accounts in the various business names associated with Lewis including Motown Mortgage Group and Astro Construction Co. Some of the funds were also used to pay individuals who provided services necessary to promote and perpetuate the scheme. If convicted of the conspiracy charge, Lewis faces a maximum of 20 years imprisonment and a $250,000 fine.

The indictment charges Lewis with four counts of wire fraud relating to specific instances between November 2003 and December 2004 in which he allegedly obtained hundreds of thousands of dollars via wire transfer from lenders to fund the purchase of residences based upon false and fraudulent representations. Each count of wire fraud carries a maximum possible penalty of 20 years imprisonment and $250,000 fine. In count six of the indictment, Lewis is accused of laundering the fraudulently obtained loan proceeds. A conviction for money laundering carries a maximum sentence of 20 years and a $500,000 fine. The maximum possible sentence for count seven, which charges Lewis with engaging in a financial transaction involving more than $10,000 in criminally derived property, is 10 years imprisonment and a $250,000 fine.

The criminal charges are the result of a joint investigation conducted by special agents of the FBI and the Internal Revenue Service - Criminal Investigations Division. The case is being prosecuted by Assistant U.S. Attorney Melissa J. Annis.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
http://houston.fbi.gov/dojpressrel/pressrel08/ho11052008.htm

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