Former Los Angeles Sheriff’s Deputy Sentenced for Mortgage Fraud
|U.S. Attorney’s Office July 08, 2014|
KANSAS CITY, MO—Tammy Dickinson, United States Attorney for the Western District of Missouri, announced today that a former deputy of the Los Angeles County, Calif., Sheriff’s Department has been sentenced in federal court for his role in an $11 million mortgage fraud scheme.
Arman Nshanian, 38, of Corona, Calif., was sentenced by U.S. District Judge Greg Kays on Monday, July 7, 2014, to three years and six months in federal prison without parole. The court also ordered Nshanian to pay $785,926 in restitution.
Nshanian was convicted at trial on Dec. 6, 2013, of conspiracy to commit wire fraud and two counts of wire fraud related to fax transmissions and e-mails that were sent across state lines during the mortgage application process. During the trial, Nshanian committed perjury when he testified in his own defense. As a result of Nshanian’s false testimony, the court ruled that he obstructed justice, which warranted an enhanced sentence.
Co-defendant James Arthur Nash, Jr., 44, also of Corona and also formerly a sheriff’s deputy, was also convicted at trial of his role in the criminal conspiracy. Nash also was found guilty of four counts of wire fraud. He is scheduled to be sentenced on Aug. 12, 2014.
Nshanian and Nash are among nine defendants who participated in a mortgage fraud scheme from early 2005 through Aug. 4, 2006. Mortgage lenders made loans of approximately $11,092,886 on 16 residential properties in Lee’s Summit, Liberty, Blue Springs, Parkville, Independence and Oak Grove, Mo. From that total, unbeknownst to the lenders, buyers received approximately $2,006,845 in secret illegal kickbacks from the loan proceeds. The scheme resulted in a financial loss to mortgage lenders of nearly $5 million.
Nshanian fraudulently purchased a residential property in Lee’s Summit, Mo., for $750,000 and received an illegal kickback of $100,000. In loan applications, Nshanian provided false information about his employment and inflated his income. He falsely represented that he would live in the residence. Nshanian would not have qualified financially for the loans if he had been truthful, as his debt to income ratio would have been 91 percent. The loans soon went into default and were foreclosed. Nshanian never saw the property, never received the keys, and never lived in it. Nshanian created a shell company that received the $100,000 payment for work purportedly done by the company, but which in reality was only used to conceal the illegal kickback Nshanian received.
A week after closing on the Lee’s Summit property, Nshanian signed a contract to purchase a $798,000 residential property in Leawood, Kan., but the purchase did not occur. He also introduced his sister, Anahit Nshanian, to the scheme. She purchased two properties in Lee’s Summit for $520,000 and $657,500; she was charged in a separate case and pleaded guilty to those fraudulent purchases. Anahit Nshanian received a total of $169,307 in kickbacks and paid $22,000 to Arman Nshanian from the proceeds. Her loans quickly went into default and were foreclosed.
According to court documents, less than three months after purchasing the Lee’s Summit property, Arman Nshanian purchased a residential property in Corona for $631,000. In the loan applications for the first and second loans, he once again made false representations to get the loans.
Nash fraudulently purchased two residential properties in Blue Springs, Mo. He received $100,000 in secret kickbacks from each property.
Seven co-defendants have pleaded guilty and been sentenced. Leann Raejeana Turner, 44, of Blue Springs, was a real estate agent working for a series of real estate companies during the conspiracy. Carole L. Colson, 71, formerly doing business as Carole Colson Real Estate in Blue Springs, now of Lake Worth, Fla., was a real estate agent. Bruce Q. Williams, 44, of Kansas City, Kan., and Anthony E. Hicks, 42, of Little Rock, Ark., were loan officers at mortgage brokerage companies. Other co-defendants were “home buyers” who conspired to defraud mortgage lenders.
The scheme involved buying and selling homes at inflated prices, obtaining mortgage loans at the inflated prices, then kicking back $100,000 of the excess loan proceeds to each of the home buyers without the lenders’ knowledge. The scheme financially benefitted all of the conspirators. Turner (the real estate agent for 15 of the 16 transactions) received commissions and sometimes hidden payments and assets; Williams and Hicks (the loan officers) received commissions from the transactions. The home buyers received illegal secret kickbacks.
Turner and Colson listed and arranged for the sale of the homes at inflated prices and solicited buyers. Misrepresentations and omissions of material facts were made to mortgage lenders in order to obtain the loans. In order to obtain the loan proceeds without the lenders’ knowledge, the buyers created fictitious businesses that issued false invoices that claimed the businesses had provided work and services for which they were entitled to receive loan proceeds.
This case is being prosecuted by Assistant U.S. Attorney Linda Parker Marshall. It was investigated by the FBI and IRS-Criminal Investigation.