Sophisticated mortgage fraud scheme
Today, for their part in a sophisticated multi-million dollar mortgage fraud scheme, Houston residents Claymon “Butch” Trammell, wife Jeannettea Williams and daughter Michelle Trammell have pleaded guilty in federal to conspiracy to commit wire fraud, according to the Federal Bureau of Investigation.
For three years beginning in 2003, the Trammells recruited and paid people to be “straw buyers” much like the recent guilty plea from Harris Capital and Skyline Capital Group founder Ronald Harris, Jr. in Newark.
The Trammells’ fraud scheme was to lure investors, promising no money down and their not having to be responsible for the mortgage payment, rather would be paid for use of their credit and name.
How the scheme worked
Court documents reveal the family business never intended on making payments on the mortgage loans the straw buyers were lending their names to, and the family team used funds to supposedly purchase “primary residences” in some cases, and several borrowers’ identities were used multiple times, one of whom federal authorities say was used to “purchase” 17 homes in Houston.
The purchase application went to Michelle Trammell and Jeannettea Williams who were licensed mortgage loan officers with Michelle Trammell acting as the loan officer, completing all applications with false information and documents about the straw buyers, knowingly lying to the lenders, including falsification of deposit verification, false rent verification and even false earnest money contracts.
Even more scandal (and punishment)
Over 70 loans in Houston were found to be connected with the scheme with every single one defaulting, most of which were foreclosed upon. Their proceeds were in the form of loan proceeds as well “bogus repair invoices and realtor and loan officer commissions” from other businesses they created to profit more from the scheme.
Sentencing is scheduled for December 05, 2011 and the husband, wife, and daughter each face up to five years in prison, up to three year supervised release afterward, with a $250,000 fine each along with restitution as ordered in December by the federal court. There is no word as to the total amount of loans falsely granted or total proceeds.
Special note: the Trammells are in no way related to the TrammellCrow Company.