Former Los Angeles Sheriff’s Deputy Sentenced in Mortgage Fraud Scheme
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.
James Arthur Nash, Jr., 44, of Corona, Calif., was sentenced by U.S. District Judge Greg Kays to three years and six months in federal prison without parole. The court also ordered Nash to pay $446,641 in restitution.
Nash was convicted at trial on Dec. 6, 2013, of conspiracy to commit wire fraud and four counts of wire fraud related to fax transmissions and e-mails that were sent across state lines during the mortgage application process.
Co-defendant Arman Nshanian, 38, also a former sheriff’s deputy from Corona, Calif., was sentenced on July 8, 2014, to three years and six months in federal prison without parole and ordered to pay $785,926 in restitution. Nshanian was also convicted at trial of his role in the criminal conspiracy, as well as two counts of wire fraud.
Nash and Nshanian 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.
Nash fraudulently purchased two residential properties on South Brittany in Blue Springs, Mo., for $540,647 (inflated by $140,747) and for $520,047 (inflated by $160,147). He received a $100,000 kickback from each property. Two months later, he unsuccessfully attempted to sell the properties to another person, using a similar fraud scheme. Nash’s loans for the properties went into default shortly after the purchases and the loans were foreclosed.
Nash attempted unsuccessfully to purchase a third property for $649,930. He also obtained a fraudulent $53,300 home improvement loan for a swimming pool at his California home.
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; Colson (another real estate agent), 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 was prosecuted by Assistant U.S. Attorney Linda Parker Marshall. It was investigated by the FBI and IRS-Criminal Investigation.