Former Charlotte Attorney Pleads Guilty Mid-Trial to Mortgage Fraud-Related Charges
Lawyer was Among 91 Defendants Charged in Operation Wax House

CHARLOTTE, NC—A former Charlotte lawyer pleaded guilty mid-trial on Wednesday, July 10, 2013, to mortgage fraud-related charges, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. The former lawyer’s plea of guilty is the latest conviction in Operation Wax House, a mortgage fraud investigation that began in 2007 and has netted 91 defendants to date, 72 of which have pleaded guilty.

Michelle V. Mallard, 46, of Charlotte, pleaded guilty to mortgage fraud conspiracy, money laundering conspiracy, and embezzlement in violation of the wire fraud statute.

U.S. Attorney Tompkins is joined in making today’s announcement by John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (IRS-CI).

Mallard’s federal criminal trial began on Monday, July 8, 2013, before Chief U.S. District Judge Frank D. Whitney. Mallard, a/k/a Michelle Crawford, was charged with embezzlement and with serving as a mortgage fraud lawyer for a mortgage fraud cell in the Operation Wax House investigation. According to evidence introduced at trial, Mallard agreed to use her law license to further mortgage fraud primarily in South Charlotte and Waxhaw, North Carolina. According to trial testimony, the co-conspirators purchased houses at inflated prices in exchange for large kickbacks representing the difference between the true price and the inflated price. Trial witnesses testified that Mallard agreed to pay such kickbacks to other members of the conspiracy and, among other things, accepted bogus checks to make it appear as though buyers had provided money when they had not. According to trial evidence and statements made by the prosecutors, Mallard participated in the mortgage fraud after having stolen over $30,000 from clients by embezzling from her trust account.

Following the presentation of evidence by the government on Monday and Tuesday, Mallard announced to Judge Whitney on Wednesday that she wished to change her plea from “not guilty” to “guilty” on all the counts she was charged with in a second superseding indictment returned by a Charlotte grand jury in September 2012. The remaining five defendants charged in that indictment have already pleaded guilty and are included in the list of defendants below.

Following her guilty plea, Mallard was released on bond pending the scheduling of her sentencing hearing. At sentencing, Mallard faces a maximum prison term of 70 years. In determining Mallard’s actual sentence, the court will consider the U.S. Sentencing Guidelines, which are not binding but provide advisory sentencing ranges. A sentencing date for the defendant has not been set yet.

Operation Wax House in the Western District of North Carolina is being handled by the Charlotte Division of the FBI and the Criminal Division of the IRS for the Financial Fraud Enforcement Task Force, along with the Securities Division of the North Carolina Secretary of State with respect to a separate prosecution. The Mallard prosecution for the government was being handled by Assistant United States Attorneys Kurt W. Meyers and Maria K. Vento.

The names and case numbers of the all the defendants charged to date in Operation Wax House are listed below, organized by their alleged role in the scheme.

Today’s announcement is part of an effort by President Obama’s Financial Fraud Enforcement Task Force (FFETF), created in November 2009, to combat financial fraud crimes by waging aggressive, coordinated, and proactive investigations and prosecutions. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, the task force is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

The names and case numbers of the all the defendants charged to date in Operation Wax House are listed below, organized by their alleged role in the scheme.

Attorneys and Paralegals

• Crawford/Mallard, Michelle 3:11cr374
• Gates, Christine 3:09cr100
• Norwood, Kelli, 3:09cr162
• Rainer, Demetrius 3:08cr239/241
• Smith, Troy, 3:08cr264

Bank Insiders

• Brown, Jamilia, 3:10cr124
• Eason, Danyelle, 3:10cr116
• Henson, Vic. F., 3:10cr124
• Jackson, Mitzi, 3:11cr374
• Ramey, Bonnie Sue, 3:10cr124

Mortgage Brokers

• Bradley, Bonnette, 3:12cr299
• Clarke, Linda, 3:10cr120
• Flood, Ericka, 3:10cr124
• Goodson-Hudson, Crystal, 3:12cr339
• Mahaney, Robert, 3:12cr340
• Scagliarini, Coley, 3:11cr374
• Staton, Walter, 3:10cr113
• Vaughn, Danielle, 3:12cr329
• Williams, Marcia, 3:12cr334
• Williams, Sean, 3:12cr336
• Woods, Joseph, 3:09cr178

Builders and Sellers

• Fink, James, 3:11cr374
• Jackson, Jennifer, 3:09cr241
• Smith, Kelvis, 3:12cr238
• Viegas, Jeffrey, 3:12cr298
• Wittig, Mark, 3:12cr335
• Wood, Gary, 3:09cr208

Facilitators and Financiers

• Hickey, Denis, 3:09cr103
• McClain, Landrick, 3:10cr124
• Mitchell, Ann Tyson, 3:12cr239
• Panayoton, Sherrill, 3:11cr176
• Taylor, Alicia Renee, 3:10cr124
• Wilson, Willard, 3:09cr161

Buyers

• Banks, Arketa, 3:12cr297
• Clarke, Benjamin, 3:12cr239
• Hillian, Kirk, 3:12cr83
• Mathis, Charles, 3:10cr1
• Mobley, Sarena, 3:10cr124
• Moore, George, 3:12cr337
• Richards, Dan, 3:10cr119
• Smith, Kevin, 3:12cr341
• Tyler, Glenna, 3:11cr200
• Vaughn, Mary, 3:12cr329
• Wallace, Jamaine, 3:12cr330
• Wellington, William, 3:12cr333

Notary Public

Willis, Anthony, 3:09cr218

Appraiser

Darden, Clinton 3:10cr108

Real Estate Agents

• Belin, Chris, 3:11cr374
• Clark, Christina, 3:09cr44
• Lee, Shannon, 3:12cr338
• Pasut, Holly Hardy, 3:12cr331
• Wolf, Nathan Shane, 3:12cr239
• Wood, Gary, 3:09cr208

Promoters

• Amini, Ramin, 3:12cr239
• Barnes, Vonetta Tyson, 3:12cr239
• Brown, William, 3:12cr239
• Bumpers, Travis, 3:12cr239
• Carr, Stephen, 3:10cr124
• Clarke, Reuben, 3:10cr120
• Coleman, Gregory, 3:10cr118
• Desimone, Frank, 3:12cr239
• Dooley, Lori, 3:12cr239
• Hitchcock, Jimmy, 3:11cr374
• Hubbard, Glynn, 3:12cr239
• Hunt, Victoria, 3:12cr239
• Hunter, Toby, 3:12cr239
• Johnson, Ralph, 3:12cr239
• Jones, Steven, 3:12cr239
• Jones, Tyree, 3:10cr230
• Marshall, Michael, 3:07cr283
• McDowell, John, 3:12cr239
• McPhaul, Elizabeth, 3:10cr114
• Mehr, Kurosh, 3:12cr239
• Mitchell, Ann Tyson, 3:12cr239
• Myles, Demetria, 3:12cr239
• Newland, Matthew, 3:12cr239
• Perry, John Wayne, Jr., 3:12cr239
• Perry, Kim, 3:10cr25
• Phillips, Rick, 3:10cr115
• Saddig, Nazeere, 3:12cr239
• Sharreff-El, Drew, 3:10cr124
• Sherald, Kiki, 3:10cr117
• Simmons, Aaron, 3:09cr240
• Snead, Todd, 3:10cr124
• Staton, Lisa, 3:10cr113
• Thorogood, Donte, 3:12cr239
• Tyson, Carrie, 3:12cr239
• Tyson, James, Jr. 3:12cr239
• Tyson, James, Sr., 3:12cr239
• Wellington, Phillip, 3:12cr332
• Wood, Purnell, 3:12cr239