Victoria Allen, 57, of Chesapeake, Va., pleaded guilty to a charge of conspiracy to commit mail and wire fraud, stemming from a mortgage fraud orchestrated by Allen and several other conspirators, including a mortgage broker, title company owner, accountant and local business owner.
Neil MacBride, U.S. attorney for the Eastern District of Virginia, made the announcement after the plea was accepted by U.S. District Judge Robert Doumar.
Allen was charged in a criminal information on Nov. 29. Allen faces a maximum penalty of 30 years when she is sentenced on March 26, 2012.
According to a statement of facts filed with her plea agreement, Allen, along with others, was involved in a mortgage fraud scheme in the Tidewater area. Allen was a loan originator and branch manager of First Horizon Home Loan Corporation, a mortgage lender located in Chesapeake. Ephrain Harris owned and operated Can Do Accounting, in the City of Newport News and was engaged in preparing tax returns and other accounting services. Another conspirator, Shavonda York, worked as a mortgage broker and owned and operated USA Processing and Destiny Consulting. Tamiko Alston operated a local title company and Darrell Booker owned a local business. Harris, York, Alston and Booker have been convicted and sentenced for their participation in the conspiracy.
The conspirators prepared and submitted numerous false documents to fraudulently obtain financing from First Horizon Home Loan Corp. — Allen’s former employer — to fund closings on various residential properties. The conspirators also used seller proceeds to fund the property transactions and purchase cashier’s checks without the knowledge or consent of the mortgage lender. These cashier’s checks were then used to provide the required buyer closing costs and down payment. In this manner, the conspirators concealed the true source of the required borrower funds and acted contrary to the instructions of the mortgage lender, which would not have approved this use of funds. Alston would create two HUD-1 Settlement Statements to conceal the disbursements.
A review of loan files and other documents showed that Allen knowingly submitted to the lender, false pay stubs and/or W-2 forms for at least 13 conventional loan transactions. In reliance on this false information, First Horizon Home Loan Corp. made loans on various subject properties. The notes on certain loans were subsequently purchased by other companies that sustained losses when the loans on a number of properties went into default and were sold at foreclosure. A review of FHA loan files and other documents indicated the defendant knowingly submitted to the lender false pay stubs and/or W-2 forms for at least 19 FHA-insured loan transactions. The FHA maintains a database named “Neighborhood Watch” that is used to track the performance of FHA-approved brokers and lenders. According to Neighborhood Watch, for the time period July 1, 2008, through June 30, 2010, the branch of First Horizon Home Loans that Allen supervised had a seriously delinquent ratio of 30.30 percent, the highest rate in the state of Virginia for that time period. Losses in property values related to the scheme approached are known to be at least $1 million.
The case was investigated by the FBI and Housing and Urban Development’s Office of the Inspector General. Assistant U.S. Attorney Brian Samuels prosecuted this case on behalf of the United States.