Real Estate Broker and a Loan Officer Sentenced to Federal Prison on Mortgage Fraud Convictions
|U.S. Attorney’s Office October 17, 2013|
ALBUQUERQUE—A real estate broker and a loan officer, both from Albuquerque, New Mexico, will be serving federal prison sentences for their wire fraud convictions, announced Acting U.S. Attorney Steven C. Yarbrough and Special Agent in Charge Carol K.O. Lee of the Albuquerque Division of the FBI.
Keith Michael Courtney, 31, was sentenced on October 9, 2013, to 24 months in prison, followed by three years of supervised release. His co-defendant Jason Johns, 40, was sentenced yesterday to five months in prison, followed by five months of home detention and three years of supervised release. Courtney and Johns also were ordered jointly to pay $493,230.88 in restitution and a $1.6 million money judgment to the United States.
Courtney and Johns were indicted in November 2011 on wire fraud charges. The three-count indictment alleged that between November 2006 and September 2007, Courtney and Johns schemed to defraud mortgage lenders by using straw buyers to apply for residential mortgage loans. At the time of the offenses charged, Courtney was part owner of Black Diamond Construction Company (BDCC), Veritas Mortgage Company and Polaris Realty, all of which maintained offices in Albuquerque. Johns was a loan officer with Veritas Mortgage Company.
In February 2012, Johns pled guilty to the indictment. Johns admitted participating in the unlawful scheme alleged in the indictment, which resulted in three wire transfers of funds in the aggregate amount of $1,601,775.84 by mortgage lenders based on false and fraudulent representations made in connection with the sale of two residences built by Courtney’s business.
Courtney was found guilty by a jury on the three counts of the indictment on March 28, 2013, after a four-day trial. The evidence at trial showed that Courtney’s company, BDCC, built two houses, one in Albuquerque and the other in Santa Fe. After the houses were completed, Courtney and Johns solicited straw buyers to purchase the houses, using the names and credit histories of the straw buyers to obtain financing from Plaza Home Mortgage Company and Lehman Brothers Bank. The loan applications falsely stated that the borrowers were buying the houses as primary residences, when in fact they had no intention of ever living in the houses. The straw buyers put no money into the transactions, did not make the mortgage payments, and were to receive $5,000 once the houses were resold. They were told that Courtney would make the mortgage payments until the houses were resold.
As a result of the false loan applications, which did not inform the lenders that the borrowers were straw borrowers, Plaza Home Mortgage Company wired two loans for $660,772.50 and $99,250.00 in connection with the Albuquerque house. Lehman Brothers Bank wired $641,803.34 for a loan in connection with the Santa Fe house. Courtney obtained loans in the aggregate amount of $1,601,775.84 from the two mortgage lenders based on the fraudulent transactions. Courtney made mortgage payments on each property for a time after the transactions closed but ultimately stopped making payments on both, at which point the houses went into foreclosure. The mortgage companies suffered losses as a result.
This case was investigated by the Albuquerque Division of the FBI and was prosecuted by Assistant U.S. Attorney Mary L. Higgins.