White Collar Crime which often involves many professionals working in collusion: bank loan officers, realtors, appraisers, accountants, and mortgage brokers. All of these profit through various commissions, fictitious sales and fees – often on loans that aren’t genuine.
Federal prosecutors on Friday charged an Atlanta woman with mortgage fraud for providing false financial information for several home buyers that resulted in fraudulently obtained mortgages totaling more than $623,000. The former Huntsville resident has been charged with federal mortgage fraud stemming from providing false income information to allow unqualified borrowers to obtain home loans totaling $623,000.
The charges were filed Friday against Melneka Parker, 27, of Atlanta, who used to own Elite Business Services in Huntsville. Prosecutors said the business was set up with the stated purpose of helping customers improve their credit scores, the U.S. Attorney’s Office in Birmingham said.
Parker assisted in the commission of a larger mortgage fraud ring among several buyers, including Gloria Allen and Crystal Douglas, both of Huntsville, who were charged by information in July.
Investigators reported finding several loans that had been submitted to Worthington on behalf of three borrowers. Investigators collected loan documents for all three borrowers, determined the pay stubs were fraudulent and examined tax records from 2006 to 2009. The tax returns showed yearly income was substantially less than what was claimed on the borrowers’ loan applications.
The charges filed against Parker outline the fraud as follows:
- After forming Elite Business Services, Parker began assisting her clients in obtaining mortgages to buy real estate in the Huntsville area. Because many of her clients were not financially eligible to obtain loans, Parker would submit false payroll and income information to the financial institution.
- The false payroll information inflated the monthly income that each borrower claimed to earn, making them eligible for a mortgage that they would otherwise have been unable to obtain. Parker also sent the false income information to another tax preparation business, which resulted in the creation of false tax documents.
- All of those documents were submitted to support the false income claims made by the borrower and Parker. As a result of her fraudulent activities, financial institutions approved $623,357 in mortgages that they would not, otherwise, have approved.
Two other Huntsville residents, Gloria Allen and Crystal Douglas, were charged in July with making false statements on federal loan documents. They have both entered plea agreements with federal prosecutors.
Parker is charged with three counts of mortgage fraud stemming from loans that were issued in June, August and November by Worthington Federal Bank.
Parker has entered a “plea by information” and is cooperating with prosecutors. Parker admitted creating false pay stubs for the borrowers that showed them with inflated incomes which allowed them to qualify for home loans, according to her plea agreement.
In Parker’s plea agreement prosecutors said the FBI and the inspector general for the Department of Housing and Urban Development “were contacted” about possibly fraudulent mortgage loan applications being submitted to Worthington Federal Bank.
Huntsville attorney Bruce Gardner, who represents Allen, said his client has cooperated with investigators over the past year. He said Allen bought a home with the loan she received and is still making payments on the home.
Gardner said her arrangement with Parker turned a non-qualified borrower into a qualified borrower.
Parker is scheduled to be arraigned on Sept. 13, in federal court in Birmingham.
The U.S. Attorney’s Office filed an information in U.S. District Court charging Melneka Parker, 27, with three counts of aiding and abetting others in the making of false statements on mortgage loan applications. If convicted, Parker could face a maximum sentence of 30 years in prison and a $1 million fine for each count.
The FBI and HUD, Office of the Inspector General, investigated the case. Assistant U.S. Attorney Patrick Carney is prosecuting the case.
” Using 3rd party verified income for mortgages eliminates possible misrepresentation in determining the borrower’s ability to repay so false income information won’t lead to future defaults.” stated Sarah Blackney the Client Relationship Director with www.cverifs.com. Blackney also stated “Unfortunately fake documents — like verifications of employment, fake pay stubs, fake Social Security benefit letters and fake W-2 forms — are still used to obtain loan modifications, new mortgages or refinances.”
cVerifs, Inc is a provider of information, services and outsourced solutions to assist banks, investors, lenders and servicers in managing needs for third party services to minimize risk as well as staying in compliance with current and future regulations. They provide consistent risk analysis and complete, accurate data capture with Collaborative Credit and Collateral products and services
Tips to Protect Yourself Against Mortgage Fraud
- Get referrals for real estate and mortgage professionals. Check the licenses of the industry professionals with state, county, or city regulatory agencies.
- An outrageous promise of extraordinary profit in a short period of time signals a problem.
- Be wary of strangers and unsolicited contacts, as well as high-pressure sales techniques.
- Look at written information, to include recent comparable sales in the area and other documents such as tax assessments to verify the value of the property.
- Understand what you are signing. If you do not understand, re-read the documents or seek assistance from an attorney or third party who represents your interest.
- Review the title history of the home you are anticipating to purchase to determine if the property has been sold multiple times within a short period. It could mean that this property has been “flipped,” and the value falsely inflated.
- Know and understand the terms of your mortgage. Check your personal information against the information as listed on the loan documents to ensure it is accurate and complete.
- Never sign any loan documents that contain “blanks.” This leaves you vulnerable to fraud.
- Check out the tips on the MBA website at for additional advice on avoiding mortgage fraud.
Potential victims need to report mortgage fraud, mortgage scams, or predatory lending practices as soon as there is an indication these might exist. Waiting to make sure can be costly. Both on the national level and on the state level, government and private organizations are available to answer questions and provide help.
If you suspect you are a victim of mortgage fraud, contact the local FBI office; if you suspect or need to report predatory lending practices or other abusive-types of lending, contact your state Attorney General’s office; if you suspect or need to report mortgage scams by a real estate broker or appraiser, contact the state’s real estate licensing board or appraisal licensing board. The Better Business Bureau is also an excellent resource if you think you are a victim of fraud.
Don’t Be A Victim Of Loan Fraud
Please remember fraud is not just a white-collar crime; it’s a people crime. People commit it, people suffer in its wake, people’s lives are ruined, people enforce it, and it’s people like you and I who can prevent it.
Mortgage Fraud is insidious; it creeps up on you. Mortgage Fraud exists because it’s able to exist.
If you think you are a victim of fraud or need a second opinion feel free to e-mail me.
Michael S. Richardson
NMLS ID# 216873
Author of “An American Epidemic, Mortgage Fraud… a Serious Business