A Lewis Center man will spend 21 months in prison for his involvement in a $1.5 million mortgage fraud scheme.
Branden D. Chatman, 33, of Lewis Center, was sentenced to 21 months in prison followed by four years of supervised release, and ordered to pay $90,678 in restitution to the victims of this $1.5 million mortgage fraud scheme.
On August 23, 2012 Chatman pleaded guilty to one count of money laundering and to one count of conspiracy to commit bank fraud.
According to court documents, between May 2006 and January 2007 Chatman knowingly conspired with others to devise a scheme to defraud lending institutions of approximately $1,500,000 in loans.
Chatman recruited property purchasers and sellers in the Columbus, Ohio area and referred those clients to a mortgage broker at Sunrise Mortgage in Columbus, Ohio. Chatman also provided the mortgage broker with the purchaser's employment and income information. In addition, Chatman owned Henderson Homes, a company that purported to do home repairs, and Chatman used this company name during property purchases.
Chatman located homes for sale in the Columbus, Ohio area and convinced the sellers that he had property purchasers who would buy the homes at prices greater than the market value and often times greater than the asking price of the home. Chatman explained to the sellers that the higher price was to going to be used to make repairs and renovations to the home. Chatman promised the purchasers that the homes would be renovated after closing.
Chatman and the mortgage broker at Sunrise Mortgage submitted Uniform Residential Loan Applications for the property purchasers. The loan applications contained false statements relative to the purchaser's income, place of employment, and the cost of renovation. All of this information was provided by Chatman to the mortgage broker.
Chatman received the excess loan proceeds generated by the property purchasers by sometimes submitting false invoices to the title companies in the name of his business, Henderson Homes. The invoices were used to justify the over-inflated purchase price based on alleged improvements that had not been performed. On other properties, legitimate invoices were submitted for renovations but the work was never completed.
Chatman knew the HUD-1 settlement statements prepared by the title company stated that the property buyers were paying money out of the sale proceeds to rehabilitate and renovate the home, when in fact these statements were false. Chatman received the excess loan proceeds generated by the sale of the properties in the form of kickbacks.
Chatman deposited the proceeds of the bank fraud activities in the form of checks that were made payable to Henderson Homes, and wire transfers received in the name of Henderson Homes, in the total amount of $176,498.