Local Property Investor Pleads Guilty to Making False Statements on Real Estate Closing Documents
COLUMBUS, OH—Cynthia S. Mild, 41, of Lewis Center, Ohio pleaded guilty in U.S. District Court today to one count of making false statements relative to down payment information entered on a Department of Housing and Urban Development Form HUD-1. Mild faces a maximum of five years in prison and a fine of up to $250,000.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation (IRS), and Kevin Cornelius, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced Mild’s plea entered today before U.S. District Judge Michael Watson.
According to court documents, between September 2004 and December 2007, Mild worked as a property investor focusing on single family homes in and around Columbus, Ohio. Mild located, purchased, refinanced, rehabilitated, rented, and sold properties in Columbus. Mild purchased approximately 30 residential family homes in the Columbus area during this time frame. Mild sold 24 of these homes to friends, colleagues, and a family member. Many of the buyers obtained mortgage loans from Fifth Third Bank. Mild, unbeknownst to Fifth Third Bank, made the down payments for her buyers by purchasing official bank checks, made out to the closing title agency, and naming the buyers as the remitters on the checks. At closing, Mild signed HUD-1 Settlement Statements for each property sale indicating that the buyers were providing the down payments, when Mild knew that she was providing the buyers’ down payment.
At closing, Mild’s original mortgage loans were paid off and the excess seller proceeds were deposited into bank accounts under her control. The seller proceeds covered the amount Mild paid for the buyers’ down payments. In some instances, Mild provided cash back to her buyers. The majority of the homes sold by Mild eventually went into foreclosure.
Specifically, $447,200 in mortgage loans was secured from Fifth Third Bank relative to the purchase of 6 homes from Mild. Mild paid for the down payments on these 6 homes and did not accurately disclose this fact on the HUD-1 Settlement Statements. Due to the mortgage loan defaults and foreclosures suffered on these 6 properties, Fifth Third Bank suffered losses of approximately $357,000.
Mild was released on bond pending sentencing for which a date has not been set.
U.S. Attorney Stewart commended the cooperative investigation by the IRS and FBI, and Assistant U.S. Attorneys Laura M. Fulton and Dan Brown, who are prosecuting the case.
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