12 Indicted in Arizona in Mortgage Fraud Schemes

Total of 43 people indicted by Arizona Mortgage Fraud Task Force since beginning of June PHOENIX - In two separate cases indicted by the U.S. Attorneys Office recently, 12 more people including loan officers, escrow agents, real estate agents, and an appraiser have been charged with conspiracy, bank fraud, wire fraud, and money laundering charges from scams that occurred during the real estate boom preceding the collapse of the Valley housing market and a tidal wave of foreclosures. U.S. v. Alexander Thomas Gregory Alexander, Paul Patrick Alexander and Bobbie Jo Johnson, all of Scottsdale, Arizona, Kara Elizabeth Shumway and Michael S. Mason, of Mesa Arizona, and Sandra M. Stevens, of Chandler, Arizona, and Michael Joseph Harris, of Phoenix, have made initial appearances in court on charges of Conspiracy, Wire Fraud, Money Laundering and False Statements. According to the Indictment, Thomas Alexander was a loan originator for American Mortgage Specialists and owned and operated a company called Sea Rock, L.L.C.. The Indictment alleges that T. Alexander devised a loan origination scheme to obtain money by assisting third party borrowers to qualify for loans from Mesa Bank with loan documents that overstated or misrepresented the borrowers income, assets and credit score. The Indictment alleges that T. Alexander used either Sandra Stevens or Bobbi Jo Johnson, Capital Title Agency escrow agents, to handle the fraudulent loans he originated. The Indictment also alleges that either Stevens or Johnson created, and submitted to the bank, an escrow receipt which falsely reflected that the borrowers down payment had been deposited into escrow and applied to the purchase. In most cases the borrowers down payment was never been deposited into escrow. The Indictment also states that Kara Shumway and Paul Alexander, who worked for American Mortgage Funding as loan processors, assisted T. Alexander by creating loan documents which overstated or misrepresented the borrowers income, assets and credit score. The Indictment indicates that T. Alexander used Michael Mason, who worked as a real estate appraiser under Mason Appraisal Services, to craft real estate appraisals which overvalued the real estate being purchased by the third-party borrower. The defendants are facing a maximum of: 30 years of prison, a $1,000,000.00 fine, or both, for each Wire Fraud or False Statement conviction; 10 years in prison, a $250,000.00 fine, or both, for each Money Laundering conviction; and five years of prison, a $250,000.00, or both, for a Conspiracy conviction. The investigation preceding the indictment was conducted by Special Agents of the Internal Revenue Service, Criminal Investigation.