A 34-count indictment was unsealed charging five people with various crimes stemming from their participation in a mortgage fraud scheme, between May 2004 and February 2009, that involved fraudulent documents, inflated purchase prices on loan documents for more than 100 Philadelphia properties, and resulted in more than $20 million in fraudulent loan proceeds. At the center of the alleged conspiracy is KREW Settlement Services, a Philadelphia real estate settlement company. The indictment charges Eric Sijohn Brown, 45, Roderick Foxworth, Sr., 56, Cynthia Evette Brown, 51, all of Philadelphia, Walter Alston Brown, Jr., 45, of Glen Allen, VA and Kevin Joseph Franklin, 50, of Albany, GA,, with one count of conspiracy to commit loan and wire fraud. The indictment also seeks the criminal forfeiture of over $13.7 million from the defendants.
The indictment was announced by U.S. Attorney Zane David Memeger, FBI Special Agent-in-Charge Edward Hanko, IRS Special Agent-in-Charge Akeia Conner, and HUD-OIG Special Agent-in-Charge Joseph Clarke.
According to the indictment, 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 Foxworth, Brown and John William Polosky (charged separately in the Western District of Pennsylvania) - allegedly submitted the fraudulent loan applications to lenders to secure the loans for the buyers, knowing that the information was false. Brown is alleged to have falsely verified that many of the straw buyers worked for her employer, Unicco Service Company, when they did not. Franklin, a title agent, is alleged to have falsely prepared two deeds and settlement statements – 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 is also alleged to have created false title insurance policies for the lenders.
The indictment alleges that 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.
In addition to the conspiracy count, Eric Brown is charged with two counts of FHA loan fraud, 14 counts of loan fraud, one count of aggravated identity theft, two counts of wire fraud, and three counts of tax evasion; Kevin Franklin is charged with two counts of FHA loan fraud, 15 counts of loan fraud, one count of aggravated identity theft, one count of wire fraud, and three counts of filing a false tax return; Foxworth is charged with five counts of loan fraud and two counts of filing a false tax return; Walter Brown, Jr. is charged with one count of FHA loan fraud, six counts of loan fraud, one count of wire fraud and two counts of tax evasion; and Cynthia Brown is charged with two counts of FHA loan fraud, five counts of loan fraud and two counts of wire fraud.
In addition to the five defendants charged in this indictment, seven defendants have been charged by information including: Willie Manley Jr., Eric Ponder, Francine Shanique Cross, Gregory Christopher Thornton, Rashika Moon, Dontaya Devore and Mark Murphy. According to the indictment, Manley created false income documents which were submitted to lenders; Ponder helped cause the submission of numerous fraudulent loan applications; Cross, a real estate agent and appraiser, helped secure mortgage loans with falsely-inflated appraisals; Thornton recruited a straw buyer and served as a straw buyer; Moon, Devore and Murphy were straw buyers who allowed their identities to be used to facilitate the submission of knowingly false loan applications.
If convicted, the defendants face the following possible maximum sentences:
Eric Sijohn Brown faces a maximum possible sentence of 486 years imprisonment, including a mandatory 2 years imprisonment; 5 years supervised release; a $15,800,000 fine; and a $2,300 special assessment.
Franklin faces a maximum possible sentence of 490 years imprisonment; including a mandatory 2 years imprisonment; 5 years supervised release; a $16,550,000 fine; and $2,300 special assessment.
Foxworth, Sr., faces a maximum possible sentence of 161 years imprisonment; 5 years supervised release; a $5,450,000 fine; and a $800 special assessment.
Walter Alston Brown, Jr. faces a maximum possible sentence of 217 years imprisonment; 5 years supervised release; a $6,950,000 fine; and a $1,100 special assessment.
Cynthia Evette Brown faces a maximum possible sentence of 197 years imprisonment; 5 years supervised release; a $6,000,000 fine; and a $900 special assessment.
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.
As alleged in the indictment, “KREW” is an acronym of the first names of Kevin Joseph Franklin, Roderick L. Foxworth, Sr., Eric Sijohn Brown, and Walter Alston Brown, Jr.