U.S. Attorney's Office
Eastern District of Pennsylvania
(215) 861-8200
October 28, 2014

Judge Sentences Defendants in West Philadelphia Multi-Million-Dollar Mortgage Fraud Scheme

PHILADELPHIA—Defendants in a mortgage fraud conspiracy involving KREW Settlement Services were sentenced today by U.S. District Court Judge Berle M. Schiller for their roles in the multi-million dollar scheme involving more than 100 fraudulent mortgage loans. Eric Sijohn Brown, 46, of Philadelphia, was sentenced to 180 months in prison and was ordered to pay $10,849,873 in restitution to the lenders; Kevin Joseph Franklin, 51, of Albany, Georgia, was sentenced to 139 months in prison and was ordered to pay $9,454,607 in restitution to the lenders; Roderick L. Foxworth, Sr., 57, of Philadelphia, was sentenced to 84 months in prison and was ordered to pay $2,701,868 in restitution to the lenders. For false filing of tax returns, Brown was also ordered to pay restitution to the IRS in the amount of $209,777, plus interest and penalties; Franklin was ordered to pay restitution to the IRS in the amount of $51,622, plus interest and penalties; and Foxworth was ordered to pay restitution to the IRS in the amount of $140,305, plus interest and penalties. All three defendants pleaded guilty to conspiracy to commit loan fraud, wire fraud, and making false statements. Co-conspirators Walter Brown and Cynthia Brown were convicted at trial. The fraud scheme resulted in more than $20 million in fraudulent loan proceeds.

Eric Sijohn Brown—a general contractor—worked with other co-conspirators to identify distressed properties to purchase, typically in the West Philadelphia area. The scheme involved recruiting “straw buyers” whose credit history and personal information was used to purchase the properties, obtain mortgage loans, and take title to the properties, when, in reality, the properties were owned and controlled by the defendants. Mortgage loan applications were then prepared in the names of the straw buyers containing a host of false information, including false purchase prices, false employment and income information, and false statements about the straw buyers living in the properties. Mortgage brokers—including Roderick Foxworth and Walter Brown—submitted the fraudulent loan applications to lenders to secure the loans for the buyers, knowing that the information was false. Cynthia Evette Brown falsely verified that many of the straw buyers worked for her employer, Unicco Service Company, when they did not. Kevin Joseph Franklin, a title agent, falsely prepared two deeds and settlement statements (referred to as “Form HUD-1”)—one for the seller that showed the actual agreed-upon purchase price and a false one for the lender that showed the grossly inflated purchase price. Franklin also created false title insurance policies for the lenders.

After the loans funded, the seller was paid the agreed-upon purchase price, and the difference between the actual purchase price and the false purchase price quoted to the lender was shared with and distributed by Franklin to Eric Brown, Foxworth, Walter Brown, and Cynthia Brown, and many of these payments were not reflected on the HUD-1 forms.

Eric Brown pleaded guilty on April 8, 2014; Franklin and Foxworth pleaded guilty on April 9, 2014.

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation, and the Department of Housing and Urban Development’s Office of Inspector General. It is being prosecuted by Assistant United States Attorney Michael S. Lowe.

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