President of Mortgage One Corp sentenced

John Richard Verner, age 56 was sentenced on Monday February 1st to thirteen years in federal prison for his part in defrauding the United States Department of Housing and Urban Development as well as other banking institutions over the course of five years.

Mr. Verner is only one of the fifteen individuals that were indicted in the mortgage fraud scheme.

A Riverside, California jury listened to testimony over four weeks and after some deliberation found Mr. Verner guilty of conspiracy to defraud the United States Department of Housing and Urban Development; bank fraud and two counts of subscribing false income tax returns.

Mr. Verner was the former president of Mortgage One Corp base in Hesperia. Prosecutors in the case charged that Mr. Verner together with M-1 Capital Corporation based in Riverside submitted, financed and sold home loans with the intent to obtain mortgage insurance from the Federal Housing Administration.  The defendant obtained Direct Endorsement Lender status from the agency in an attempt to further their scheme to defraud the agency.

The defendant submitted fraudulent loan documents as well as bogus audit reports to continue to receive their Direct Endorsement and continue their scheme. Documents sent to the agency were routinely doctored to show that borrowers qualified for the loans they were obtaining from the Federal Housing Administration. Some of the applications submitted used straw buyers who had no stake in the home being purchased.

Several of the loans made by Mr. Verner and his conspirators were sold to Firstar Bank, N.A, and Chase Manhattan Mortgage Corp.

Mortgage One and M-1 submitted over three thousand loans to be federal insured of those loans over nine hundred ended up in foreclosure which resulted in a loss of over thirty million dollars according to the United States Attorney’s Office.

Mr. Verner was also convicted of intentionally omitting several of his assets on his 1999 and 2000 tax returns. Mr. Verner did not include his corvette, his recreational vehicle and jewelry.

Prosecutor Sheri Pym stated that during the trial Mr. Verner’s testimony seemed to be a list of lies that shifted blame to other individuals and defendants in the case.

United States Judge Virginia Phillips agreed that Mr. Verners testimony was knowingly untruthful on a number of points.