Loan Officers plead Guilty to flipping

Mark Kiel and Codi McArdle pleaded guilty to mortgage fraud on October 22, 2009.  Mr. Kiel who was the owner of First National Mortgage Solutions, LLC located in Missouri and who employee Mr. McArdle entered their pleas for their participation in a larger mortgage fraud scheme that involves straw buyers and focuses on one title agent.

Mr. Keil and Mr. McArdle according to their plea agreements state that they participated in an act to defraud mortgage lenders with the aid of Sheryl Elms, who is a title agent for Integrity Title and Legacy Land Title. Ms. Elms has not been indicted as of today for her participation in the flipping scheme.

The flipping scheme included straw buyers and inflated purchase prices and appraisal values. Ms. Elms according to plea agreements prepared HUD-1 settlement statements for the transactions. She would prepare one HUD-1 settlement statement with the actual purchase price to be presented to the seller and one with the inflated price for the lender.  The difference between the prices is called the spread. The spread was then cut to Mr. Kiel and Mr. McArdle at the time of closing and were not disclosed to the lender as the lender would be sent the altered HUD-1 settlement statement.

The Federal Bureau of Investigation has identified thirty seven transactions that involved this method of flipping and has affected ten different mortgage lending institutions. The total cost of the fraud is estimated around four hundred thirty eight thousand dollars.

Mr. Kiel and Mr. McArdle in their plea agreement included three properties that were handled in this manner; two properties in Kansas City, MO and one property in Liberty, MO.

Mr. Kiel and Mr. McArdles cases are also related to other cases currently being handled by the United States Attorney for Missouri in Kansas City. The case against Joseph and Julie Silverstro appears to be related. Mr. and Mrs. Silverstro also received spread checks from Ms. Elms and were sentenced for their participation in the scheme back in August of 2009.  Seven other individuals were indicted in December of 2009 for their participation in the wide spread flipping scheme.