Albuquerque real estate agent jailed
After a lengthy investigation by the Federal Bureau of Investigation (FBI), Albuquerque real estate agent, Kevin Powers, has been sentenced by a U.S. District Judge to a 56 month prison term for 17 counts of wire fraud connected with a scheme that defrauded mortgage lenders and obtained over $5.5 million in loan proceeds through “false pretenses, misrepresentations, and omissions,” according to court documents. Restitution amounts will be set at a separate hearing.
Powers, 51 was found guilty of all counts he was charged with, and originally was AAA Worldwide Mortgage’s branch manager in Albuquerque, but in 2006, he founded Powers Mortgage. He masterminded a scheme in 2006 and 2007 when he was a real estate agent and mortgage broker for the buyers he represented, with those clients testifying they had no money to invest, but Powers got them 100 percent financing, rebated 20 percent of the loan proceeds (roughly $1.2 million) which they were instructed to use to make mortgage payments until the homes could be resold.
How the scheme worked and failed
Powers’ scheme got tricky when he told sellers that the buyers wanted to remodel the home and they would only buy if the seller raised the sales price to include funds for renovations. When the sellers agreed, Powers got an appraisal at the higher price, submitted loan applications on behalf of the buyer that falsified their income and claimed they would be the primary residents, not investors. The scheme failed when every single buyer defaulted on the residential purchases.
Senior bank officials testified that they would not have approved the loans if they knew the real income amounts of the buyers, that the buyers were not primary residents, or that buyers were getting kickbacks based on an inflated sales price to float the loan until the property could be flipped.