Posted by Cochise on May 29, 2008 at 17:44:34:
The Grass Aint ALways Greener
Real estate appraisers Peggy Snodgrass, 40, of Independence, who operated a business in Raytown, Mo., and Phillip Thomas, 50, of Kansas City-North, pleaded guilty to providing artificially inflated appraisals on properties for which Barber was seeking mortgage loans. Snodgrass was sentenced to five years of probation and ordered to pay $1,149,188 in restitution. A sentencing hearing has not yet been scheduled for Thomas
REAL ESTATE INVESTOR SENTENCED TO 12 YEARS
FOR $19 MILLION MORTGAGE FRAUD
KANSAS CITY, Mo. – Bradley J. Schlozman, United States Attorney for the Western District of Missouri, announced that a real estate investor was sentenced in federal court today for orchestrating the largest mortgage fraud scheme ever prosecuted in the Western District of Missouri.
Brent Michael Barber, 42, of Belton, Mo., was sentenced by U.S. District Judge Fernando J. Gaitan this morning to 12 years and seven months in federal prison without parole. The court also ordered Barber to pay $11,206,419 in restitution to the victims of his mortgage fraud schemes.
“This defendant tore through low-income neighborhoods like a hurricane,” Schlozman said, “wreaking financial havoc on individual victims and financial institutions, and leaving behind a devastating trail of residential blight. Fortunately, his criminal career has been brought to a halt, and he is being held accountable for the damage he inflicted on the community.”
According to Schlozman, Barber’s mortgage fraud schemes involved loans on more than 300 properties, totaling more than $19 million. “More than 80 investors were recruited into the scheme, most of whom suffered financially as well as mentally and emotionally,” Schlozman said. The actual loss for the financial institutions that were defrauded by Barber totaled more than $11 million.
On Feb. 23, 2006, Barber pleaded guilty to 104 counts contained in two federal indictments. Those indictments, as well as a third federal indictment for which Barber was convicted by a jury, involve separate schemes to defraud mortgage lending companies of millions of dollars.
Barber recruited people to purchase rental properties, assuring them that he would find renters for the properties and sell the properties a short time later, so that the victim-investors would have no financial risk and a guaranteed quick profit. Then he provided false information on the loan documents and arranged for inflated appraisals in order to receive approval for the loans. Many of the buyers would not have qualified for the loans if true information had been given to the lenders. Their credit was damaged when Barber failed to find renters for the properties and failed to maintain the monthly payments. Financial institutions that foreclosed on the properties were often unable to sell them at the artificially-inflated price of the outstanding mortgage.
Schlozman added that many of the properties involved in the property-flipping schemes are in the downtown and midtown areas of Kansas City.
“The victims of these fraud schemes go well beyond the immediate victims who suffered direct financial losses,” Schlozman said. “Everyone living in or near these neighborhoods suffered as a result of Barber’s criminal fraud.”
“Neighborhoods in Kansas City’s core were devastated by 200 homes left vacant or in a state of disrepair,” Schlozman added. “Vacant houses lower property values in neighborhoods and result in more crime because they may be taken over as drug houses or used by vagrants. A significant number of these properties ended up in housing court – in fact, the city issued 99 citations for violations at these properties. Many properties ended up having to be destroyed as a public danger, at significant cost to the city and taxpayers.”
Barber pleaded guilty to the conspiracy count contained in each of the two federal indictments. He also pleaded guilty to 52 counts of interstate transportation of funds obtained by fraud and two counts of money laundering contained in the first indictment. He also pleaded guilty to 46 counts of interstate transportation of funds obtained by fraud and two counts of money laundering contained in the second indictment.
“For six years, Barber’s livelihood was essentially one fraud scheme after another,” Schlozman said. “He reaped the lion’s share of the profits from his criminal enterprise, raking in more than $6.5 million for himself while training others to follow in his footsteps.”
During the first conspiracy, from May through October 1999, Barber was a client of Ameriquest Mortgage in Gladstone. During that period, he conspired with co-defendants Roderick Neil Criss, 35, of Kansas City, who was the branch manager, and Cauncey Calvert , 36, and Avonda Nicodemus, 34, both of Kansas City, who were account executives, to defraud Ameriquest.
As a result of that conspiracy, Ameriquest Mortgage approved 66 fraudulent loans totaling $4 million.
A second conspiracy began in October 1999, when Barber approached Criss and Calvert and suggested they set up a mortgage broker business to broker mortgage loans, giving Barber’s loans precedence. Criss and Calvert agreed, launching Express Mortgage, Inc., through which Barber conspired with Criss, Calvert and Robert Dale Beckley, 34, of Kansas City, to defraud lending institutions. In addition, Barber admitted he engaged in additional fraudulent real estate transactions involving both commercial and residential properties. These transactions involved more than $2.7 million of additional loss.
As a result of that conspiracy, lenders approved 233 fraudulent loans totaling $15.6 million.
Each of those co-defendants have pleaded guilty. Criss was sentenced to three years and one month in federal prison without parole and ordered to pay $4,553,188 in restitution. Calvert was sentenced to one year and six months in federal prison without parole and ordered to pay $9,146,578 in restitution. Beckley was sentenced to one year and one day in federal prison without parole and ordered to pay $7,988,077 in restitution. Nicodemus was sentenced to five years of probation, including four months of electronic monitoring, and ordered to pay $1,158,501 in restitution.
On Dec. 2, 2005, Barber was found guilty of three counts contained in an Oct. 7, 2004, federal indictment.
That case involved a property flipping and mortgage fraud scheme while Barber was involved in the business of buying and selling real estate, doing business as KC Properties and KC Securities LLC. Vernon David Williams, 58, of Kansas City, was an employee of mortgage brokerage companies in Merriam, Kan., and Lee’s Summit, Mo. Williams pleaded guilty to his role in the scheme and was sentenced to five years of probation.
The jury found that Barber conspired with Williams to defraud MILA, Inc., a mortgage lending company with its principal office in Mountlake Terrace, Wash., and Finance America LLC, a mortgage lending company with its principal office in Irvine, Calif., from July 24, 2004, to Sept. 16, 2004.
In separate but related cases:
Daryl Ann Daniel, 52, of Independence, Mo., pleaded guilty to defrauding a mortgage lender during the sale of property she owned in Independence. Daniel, who was employed as a title company closer, awaits sentencing.
Wanda L. Barber, 62, of Belton, the mother of Brent Barber, was sentenced to four years of probation after pleading guilty to perjury while testifying before the grand jury. Wanda Barber admitted that she made several false material declarations while testifying under oath to a federal grand jury that was engaged in an investigation of her son
Real estate appraisers Peggy Snodgrass, 40, of Independence, who operated a business in Raytown, Mo., and Phillip Thomas, 50, of Kansas City-North, pleaded guilty to providing artificially inflated appraisals on properties for which Barber was seeking mortgage loans. Snodgrass was sentenced to five years of probation and ordered to pay $1,149,188 in restitution. A sentencing hearing has not yet been scheduled for Thomas.
These cases are being prosecuted by Assistant U.S. Attorneys Linda Parker Marshall and Daniel M. Nelson. They were investigated by the Federal Bureau of Investigation, IRS-Criminal Investigation and the Department of Housing and Urban Development, Office of Inspector General, with cooperation of the Kansas City, Mo., prosecuting attorney.
http://www.usdoj.gov/usao/mow/news2006/barber_brent.sen.htm