A Kansas City, Mo., builder has become the latest of more than a dozen people indicted in a $12.6 million mortgage fraud scheme to plead guilty to the charges.
Jerry R. Emerick, 39, of Raymore, Mo., waived his right to a grand jury and pleaded guilty on April 9 to federal charges of conspiracy to commit mortgage fraud, wire fraud, and transfer of funds obtained by fraud across state lines, according to a report in the Kansas City Star.
A release noting the grand jury indictments issued on Oct. 29, 2008, accused the defendants in the case of a scheme that involved home buyers obtaining inflated mortgage loans on homes built by Emerick’s Ty Construction and Residential Contracting company and then pocketing kickbacks as high as $125,000 a house, according to the U.S. Attorney's Office for the Western District of Missouri.
Under the plan, buyers allegedly provided false information to mortgage lenders and then created shell companies to receive kickbacks from Emerick, according to the U.S. Attorney's office.
By pleading guilty, Emerick admitted to participating in the fraudulent loans on 22 of the residential properties, that he was aware the loan applications, and supporting documents included false and fraudulent information and omissions of fact. Also, that he was aware the buyers were creating false business entities to receive the loan proceeds.
Emerick also admitted that he submitted false documentation to title companies and made fraudulent material representations to title companies in order for the buyers to receive funds from the loan proceeds. He also made payments to the buyers outside of closing.
Prosecutors said, in total, mortgage lenders approved 25 loans for more than $12.6 million between June 2005 and May 2007. From that total, buyers are accused of receiving $2.3 million from the proceeds.
Under federal statutes, Emerick could be sentenced to up to five years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. Emerick’s lawyer, J.R. Hobbs, said his client “accepts responsibility for his conduct and has cooperated and will continue to cooperate, The Kansas City Star reported.
In addition to buyers, a mortgage loan officer and an independent insurance agent who insured the homes also have pled guilty in the case.
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