Mortgage Fraud Investigation Yields Guilty Plead

The Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigations Department are extremely please with Assistant United States Attorney Douglas C. Bunch on August 3 of this year, as he received a conviction in a Mortgage Fraud investigation that has played out over three years.

Scott Allen Kassebaum, of Springfield, Missouri pleaded guilty to charges alleging that he was part of a conspiracy to defraud lenders between March 2006 and July 2006, in addition to wire fraud and money laundering.  Cheryl Kassebaum, wife to Scott pleaded guilty to a similar charge last month according to court records.

The method of fraud that the Kassebaums where involved in is a scheme that allows the homebuyer to received large sums of proceeds back on a purchase mortgage loan after it closes and involves the use of a “Straw Buyer”. The lender typically has no knowledge because the purchase mortgage application that the loan is based on is completed with false information.

Three mortgage lenders First Magnus, Homecomings Financial and Countywide Financial were victim to this fraud. Mortgage lenders as a whole have procedures in place to prevent this however some scams are so well organized it is difficult to catch the scam while it is in process. Documents are falsified and phone numbers refer back to the scammer. The scam included seven mortgage loans which ranged from $200,000 to $400,000 in loan size. The Kassebaums received more than $209,000 in loan proceeds as a result of the falsified applications.

Scott Kassebaum, for his part acted as a “Straw Buyer”; he acted as a purchaser and borrower to help execute applications he knew were false.  He also helped to facilitate the return of proceeds to him and other borrowers after the loan closed without the lenders knowledge. The proceeds ranged from $30,000 to approximately $100,000. The proceeds were return after the loan closed and routed through Master Marketing Consultants and then through Metro Consulting Group.  Some of the borrowers involved defaulted on the loans and the lenders have foreclosed on them.

The investigation also included twenty nine homes in Christian and Greene counties. The FBI last year indicted Randal Lee Hall, Shanda Lynn Moore and Steven Ray Spencer for alleged participation in similar scams. One scam ranged from January 2006 to February 2007 which Spencer and Moore were indicted for and one ranged from November 2005 to October 2006 which Spencer and Hall were indicted.