David Dodd 2:33 a.m., May 19
Three Charged in Mortgage Loan Origination, Kickback Scheme
A May 10 federal indictment unsealed today (July 12) charges Mary Armstrong, Ramona real estate agent Teresa Rose, and William Fountain with devising and pulling off a loan origination and kickback scheme that involved homes in Ramona and El Cajon. Armstrong, a fugitive who did not have a mortgage loan broker license, was arrested today in Las Vegas. According to the indictment, the defendants advertised that people could buy property with no money down; the alleged scamsters would make the mortgage payments with money they got from renting the homes out. But the so-called investors were straw buyers. The defendants allegedly falsified loan applications that contained false information, such as that the investors raked in fat income from fake employers. Fake W-2s and pay stubs were cooked up to support the income claims, according to the government. The three defendants purchased at least 16 properties, secured more than $11 million in mortgage loans, skimmed more than $1.5 million in sham construction kickbacks, and raked in more through commissions and fees. Mortgage lenders lost $5 million, says the U.S. Attorney's office.