Alabama Man Sentenced to More Than 17 Years in Prison for His Role in $15 Million Mortgage Fraud Scheme, Including Attempted Murder of a Witness
CAMDEN, NJ—A Ventress, Alabama, man was sentenced today to 210 months in prison for conspiring to defraud financial institutions and launder stolen funds as part of a $15 million mortgage fraud scam that used phony documents and “straw buyers” to make illegal profits on overbuilt condos, U.S. Attorney Paul J. Fishman announced.
Kinard Henson, 43, previously pleaded guilty before U.S. District Judge Jerome B. Simandle to a second superseding indictment charging him with one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering and one count of attempted murder of a witness in a federal case. Judge Simandle imposed the sentence today in Camden federal court.
According to the documents filed in this case and statements made in court:
Henson was among 11 defendants charged in July 2012 with conspiracy to commit wire fraud and conspiracy to commit money laundering. Henson’s conspirators located oceanfront condominiums overbuilt by financially distressed developers and negotiated a buyout price with the sellers. They then caused the sales prices for the properties—located in Wildwood Crest and North Wildwood, New Jersey, other locations in New Jersey and in Naples, Florida—to be much higher than the buyout price to ensure large proceeds. Other defendants helped conceal the true sales prices of certain properties through inflated sales contracts and sale and finder’s fee agreements.
Henson and others recruited straw buyers to purchase certain properties at the inflated rates. The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans. The conspirators created false documents, such as fake W-2 forms, pay stubs, bank statements and investment statements, to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.
Henson’s conspirators also caused fraudulent mortgage loan applications in the name of the straw buyers, including the supporting documents, to be submitted to mortgage brokers that the brokers knew were false. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings, Henson received a portion of the proceeds after his conspirators had funds wired or checks deposited into various accounts they controlled.
Henson learned of a subpoena seeking documents in connection with a straw buyer’s purchases of real estate properties shortly after it was served by federal law enforcement agents on a mortgage brokerage firm. Henson, who had recruited the straw buyer, contacted another individual to kill the straw buyer. They then lured the straw buyer to a wooded area in Mobile, Alabama. At Henson’s direction and using Henson’s firearm, the other individual shot the straw buyer multiple times.
In addition to the prison term, Judge Simandle sentenced Henson to serve five years of supervised release.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark; and IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, in Newark, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorneys Matthew T. Smith and Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.