Denise Haines, 43, of Birdsboro, Pa., a former mortgage broker with American Group Mortgage Corp., was sentenced in U.S. District Court in Philadelphia on Wednesday to 10 days in a federal prison, followed by eight months of house arrest, on charges of bank fraud, loan application fraud, and aiding and abetting in connection with an elaborate mortgage fraud scheme, according to the U.S. Attorney's Office.
U.S. District Court Judge Mitchell S. Goldberg also ordered Haines to complete three years' probation and 100 hours of community service. In addition, Haines must pay $1,353,111 in restitution and spend her weekends in a halfway house as part of her house arrest.
Last month, Michael A. Wilkerson Sr., 47, formerly of East Coventry, Pa., was sentenced to 170 months in a federal penitentiary and five years' probation for his involvement in the scheme. Wilkerson is a former pastor with New Millennium Life Restoration Fellowship, with locations in Phoenixville and Spring City, Pa., the DOJ reports.
In addition, Wilkerson's wife, Joyce, who previously pleaded guilty to fraud-related charges, was sentenced to one day in federal prison, four years of probation and 400 hours of community service for her role in the scheme.
According to the DOJ, the trio engaged in a scheme to defraud JP Morgan Chase's predecessor, Chase Manhattan Bank, by fraudulently obtaining home loans valued at more than $6 million for properties located in Schwenksville and Glenmoore, Montgomery County, Pa., between 2006 and 2008.
As part of the scheme, Wilkerson recruited some of his congregants and friends to act as "straw purchasers" – meaning they would sign loan documents as the purchaser of a house and attend the property settlement – for which Wilkerson paid them $15,000, the DOJ says in a release. In addition, Wilkerson paid the recruits another $5,000 if they referred other straw purchasers to him.
Haines, meanwhile, submitted fraudulent loan applications in the transactions to Chase Manhattan Bank. These fraudulent loan applications falsely represented the appraised value of the homes, the identification of the "straws," the source of funds, the borrower's income and assets, and their intent to take possession of the homes as their primary residence.
Wilkerson's wife, Joyce, assisted in the scheme by writing out the checks to the "straws" and also pretended to be a co-purchaser of each of the homes at the time of settlement, the DOJ said.
Lee Garell, a real estate broker who also pleaded guilty, prepared the sales paperwork for each of the homes that were sold to the "straws" and, along with Wilkerson, dictated the fraudulent terms set out in the settlement sheets.
When the loans were funded at the time of settlement, the defendants manipulated the documents prepared at settlement and, later, forwarded the settlement documents to Chase Manhattan Bank to make it appear to the bank that the "straws" brought considerable cash to the closings. In fact, all of the money involved at the settlement actually came from Chase Manhattan Bank.
After settlement, Wilkerson took possession of all of the homes, rented at least two of them and lived in another. He paid the mortgages with the proceeds from the fraudulent mortgage transactions and with rental income for approximately six months and then told the "straw" purchasers that they had to pay the mortgages. This last act led to the loans falling into default and then foreclosure, resulting in a loss of approximately $3 million.