Two former real estate agent pleaded guilty in federal court to a role in a nearly $11 million mortgage fraud scheme that involved more than two dozen residential properties.
Beth Phillips, United States Attorney for the Western District of Missouri, announced that two former real estate agent pleaded guilty in federal court to a role in a nearly $11 million mortgage fraud scheme that involved more than two dozen residential properties.
Frankie R. Powell, 68, of Republic, Mo., and Tammy R. Fedel, 54, os Springfield, Mo., pleaded guilty in separate appearances before U.S. Magistrate Judge James C. England to participating in a conspiracy to commit wire fraud that began Nov. 1, 2004. At the time of the conspiracy, both Powell and Fedel were Missouri board-certified real estate agents who worked and sold real estate for Walker Realty and Associates, Inc., in Springfield, Mo. Powell and Fedel were also private investors who purchased and re-sold residential real estate through Walker Realty.
Co-defendant William Wagoner, 58, address unknown, pleaded guilty to aiding and abetting wire fraud on July 6, 2011. At the time of the conspiracy, Wagoner was employed as a mortgage broker at Home Lending Solutions, Friendly Finance and American Home Lending Group, where he brokered mortgage transactions for Walker Realty. Wagoner was also a private investor who purchased and re-sold residential real estate through Walker Realty.
A federal indictment alleges that Powell, Fedel, Wagoner and co-conspirators caused mortgage lenders in at least 26 fraudulent real estate transactions to transmit loan proceeds totaling approximately $10,944,023. Conspirators defrauded mortgage lenders by submitting fraudulent loan applications to purchase residential properties at artificially inflated prices, with a significant portion of the purchase price of each home being returned to the buyer without the lender’s knowledge or consent.
As a result of the scheme, conspirators received kickback payments of approximately $4.3 million. Most of the residential properties involved in the mortgage fraud scheme have gone into foreclosure.
By pleading guilty, Powell admitted that he engaged in nine fraudulent real estate transactions totaling $1,126,688, for which he received $643,025. Under the terms of today’s plea agreement, Powell must forfeit $643,025 to the government.
Fedel admitted that she engaged in two fraudulent real estate transactions, which resulted in a loss of $416,187 suffered by the lending institutions. Under the terms of today’s plea agreement, Fedel must forfeit the proceeds she received, which total $43,082, to the government.
Wagoner admitted that he was involved in eight fraudulent real estates transactions totaling $2,578,531. Wagoner prepared and submitted the loan applications and verified the false income, employment, and sales price information contained in those applications. Wagoner and others received $127,200 in proceeds, which he is jointly and severally liable to forfeit to the government.
Under federal statutes, Powell, Fedel and Wagoner are each subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $1 million. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.