Kankakee Mortgage Broker Enters Guilty Plea in Fraud Scheme
| U.S. Attorney’s Office October 25, 2011 |
URBANA, IL—A Kankakee, Ill., woman, Valerie Allen, 32, waived indictment and pled guilty today to an information charging her with one count of mail fraud for her role with others in a mortgage fraud scheme from November 2003 to August 2007, that resulted in losses of more than $2.5 million. Two other defendants, Tom Hendrickson, 63, and Michael Sample, 41, both of Manteno, Ill., previously waived indictment and pled guilty to an information charging each with one count of mail fraud related to their respective roles in the scheme. Hendrickson pled guilty on July 7, 2011; Sample entered a plea of guilty on Aug. 2, 2011.
According to court documents, Hendrickson and Sample were business partners who operated T&M Rentals in Kankakee and maintained a trust at a Manteno bank. Using a line of credit extended to the trust from the bank, Hendrickson and Sample were able to purchase multiple properties out of foreclosure. Upon purchase of a property, Hendrickson and Sample advised a broker of the purchase and how much money they wanted for the property.
As detailed in court documents, buyers were enticed to buy the properties as ‘investments’ or rental units with a promise of funds to be provided at closing as an incentive. The brokers, including Valerie Allen, assisted buyers to obtain a mortgage, primarily through Long Beach Mortgage Company, a wholly-owned subsidiary of an FDIC-insured bank, Washington Mutual. In nearly all cases, false information was provided to the lender regarding the buyers’ financial condition and the source of the down-payment, which in most cases, was provided by the sellers, Hendrickson and Sample. At the real estate closing, disbursements were made to the sellers, brokers, and buyers, and the down payment monies were returned to the sellers. After closing, the buyers generally defaulted on the mortgage, causing the properties to revert back into foreclosure.
Each offense of mail fraud carries a maximum statutory penalty of up to 20 years in prison and a fine of $250,000. The defendants may also be ordered to pay restitution.
Status hearings have been scheduled related to proposed sentencing dates as follows: Sample on Nov. 18, 2011; Hendrickson on Jan. 9, 2012; and Allen on Feb. 10, 2012.
Another defendant in a separate but related case, Sherika Willingham, 39, of Kankakee, was charged by indictment on July 13, 2011, and a status conference is scheduled for Dec. 22, 2011, in federal court in Urbana.
Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.
The charges are the result of an investigation by the FDIC, Office of Inspector General; the Federal Bureau of Investigation; and, the U.S. Postal Inspection Service. The cases are being prosecuted by Assistant U.S. Attorney Jason M. Bohm.