Mortgage Fraud Ring Busted

     DALLAS (CN) – A “motivational speaker” from Texas, who hawked a book and infomercial on how to make money in real estate, is among eight people convicted of a multimillion-dollar mortgage fraud scheme. Eric Rulack Farrington Jr., 57, was president of Eric Farrington Seminars and Prestige Capital Corp., which did business as Farrington Mortgage Group.




     Farrington was a manager of EFC Investments, which did business as EFC Management Co. All operated out of Dallas.
     A federal jury this week convicted Farrington of conspiracy to commit wire fraud, bank fraud, aiding and abetting, 15 counts of wire fraud and aiding and abetting, 10 counts of money laundering and aiding and abetting, five counts of engaging in a monetary transaction with criminally derived property and aiding and abetting.
Prosecutors said the eight defendants ran the scheme from March 2002 to January 2006. They found single-family residences for sale in the Dallas area, including distressed and pre-foreclosure properties, and negotiated a sales price. They created surplus loan proceeds by inflating the sale price, often using inflated appraisals.
“In some cases, they would create a bogus outstanding mortgage lien to be discharged,” prosecutors said. “They recruited individuals with high credit scores to act as borrowers and falsely represented to them that the property would be managed by the defendants and rented by a suitable tenant; that the mortgage, interest, taxes, insurance and property maintenance would be paid from the rental income; and the purchasers/borrowers would have no expenses. The borrowers had no intention to live in the property and did not have sufficient income to repay the loans.”
Here are the other defendants, their roles, and the counts on which they were convicted:
Janice Little Shepherd, 51, of Irving, Texas, Farrington’s former fiancé, was a mortgage broker who did business as EFC Capital Mortgage Company, in Dallas. She was convicted of conspiracy to commit wire fraud, 11 counts of wire fraud and aiding and abetting, four counts of engaging in a monetary transaction with criminally derived property, and aiding and abetting.
Regis Lamont Williams 44, of Dallas, was a Texas certified real estate appraiser who did business as Executive Certified Appraisal. He was convicted of conspiracy to commit wire fraud, one count of bank fraud and aiding and abetting, nine counts of wire fraud and aiding and abetting, five counts of engaging in a monetary transaction with criminally derived property and aiding and abetting.
Kevin Ray Sanderson, 35, of Irving, was a business associate of Farrington and the vice president of Farco Construction, of Dallas, which also did business as Farrington Mortgage Group. He was convicted of conspiracy to commit wire fraud, bank fraud, four counts of wire fraud and aiding and abetting, and money laundering.
James Edward Jones, 44, of Dallas, was a real estate agent. He was convicted of conspiracy to commit wire fraud, two counts of wire fraud and aiding and abetting.
Edwin Terrence Bell, 43, of Fort Worth, was in real estate management and was president of Togetherness Inc. Bell also did business as The Togetherness Group and TTG Inc. He was convicted of conspiracy to commit wire fraud, five counts of wire fraud and aiding and abetting, two counts of engaging in a monetary transaction with criminally derived property and aiding and abetting.
Micheal (sic) Lewis Andrews, 50, of Plano, was CEO of Second Chance Mortgage dba 2nd Chance Mortgage. He was convicted of two counts of wire fraud and aiding and abetting.
Robert John Mason, 55, of Oak Leaf, Texas, was an employee of Prestige Capital Corp. He was convicted of two counts of wire fraud and aiding and abetting.
Conspiracy to commit wire fraud and wire fraud carries a sentence of up to 20 years in prison and a $250,000 fine. Bank fraud is punishable 30 years in prison and a $1 million fine. Money laundering is punishable by 20 years in prison and a $500,000 fine, and engaging in a monetary transaction with criminally derived property is punishable by 10 years in prison and a $250,000 fine.
     The defendants also must forfeit $8.5 million. No sentencing dates have been announced.

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