FOR IMMEDIATE RELEASE
November 7, 2007
Regency Title Company Pled Guilty to Mortgage Fraud in 103 Houses, Mostly in Cleveland, with a Market Value of $16 Million, and Regency's Officer,
Shirley Rodgers, Pled Guilty to Felonies
55% of Houses Fell into Foreclosure or Tax Delinquency
CLEVELAND - Cuyahoga County Prosecutor Bill Mason continues his battle against predatory lending and mortgage fraud. Regency Title Company, operated by Shirley Rodgers, pled guilty today to mortgage fraud offenses involving 103 houses with a market value of approximately 16 million dollars. Rodgers and her title company were indicted in two mortgage fraud cases in January and February 2007 that involved houses at 35675 Sedge Circle in Solon, 2485 Lander Road in Pepper Pike, and 21999 Shelburne Road in Shaker Heights. A description of these cases is below.
Today's plea by the title company regarding 98 other houses in Cuyahoga County, and two in Sandusky, extends to properties beyond the original indictment and is the result of an ongoing investigation by the Prosecutor's Office, and detectives from the Solon Police Department and the Shaker Heights Police Department. Regency Title began operating in 1999, and Rodgers, who is 71-years-old, had been in the real estate industry for her entire career. Rodgers will be sentenced on December 10, 2007.
The 98 houses in Cuyahoga County are located in 14 communities: Cleveland, Cleveland Heights, Solon, and Shaker Heights have the highest numbers, 37, 16, 13, and 10, respectively. The other communities are: Bedford City, East Cleveland, Euclid, Garfield Heights, Maple Heights, Pepper Pike, Shaker Heights, Solon, South Euclid, University Heights, and Warrensville Heights.
Fifty-five percent of the houses went into foreclosure or tax delinquency. Forty-four percent went into mortgage foreclosure. Ten percent went into tax delinquency and/ or tax foreclosure.
"Today's plea—involving 103 houses—resulted from a collaborative effort among law enforcement agencies over many months. It's another step toward my goal of stopping the corrosive effect that mortgage fraud and predatory lending is having on our neighborhoods and economy," said Prosecutor Bill Mason. "This title company's fraudulent activity shows how pervasive mortgage fraud is in our county. Of the 17,000 foreclosure filings expected this year, I estimate that at least 5,000 of these involve mortgage fraud and predatory lending. But we will continue to send the message to others who are thinking about getting involved: you will be prosecuted if you get involved."
Regency Title pled to one (1) count of Engaging in a Pattern of Corrupt Activity, generally known as RICO, a first degree felony, and was ordered to pay restitution of $150,000 for the houses in Solon, Pepper Pike, and Shaker houses, as well as the 100 other houses. On behalf of her title company, Rodgers admitted that her company engaged in similar fraudulent mortgage fraud in the 100 other houses, as it did in the Solon, Pepper Pike and Shaker houses. She and her title company participated in a down payment scheme and facilitated the distribution of closing proceeds to third parties other than the seller. The victims are the lenders who were deceived by these schemes, and the neighborhoods who are affected by the results of these schemes. The lender, left with a foreclosed home, takes a loss at the time of foreclosure sale. Additionally, the value of homes in the neighborhood decreases by thousands of dollars for every foreclosed home on that block, and, in many cases, the neighborhood is left with boarded up and abandoned houses that leads to increased crime.
Rodgers, 71, of Independence, pled to two (2) counts of Theft by Deception, fourth degree felonies; and one (1) count of Forgery, and one (1) count of Falsification, both fifth degree felonies. Each count represents her fraudulent activity in the Solon, Pepper Pike, and Shaker houses. As part of the agreement, she is prohibited from working in the real estate business. She will also turn over all of her company's title files to the Prosecutor's office, and she will testify truthfully in pending and future mortgage fraud cases. She will pay $5,000 in fines.
Renita Burke and William Daniel, who were indicted on the mortgage fraud case involving the house at 21999 Shelburne Road in Shaker Heights, pled today as well.
Burke, 44, of Euclid, pled to one (1) count of Theft by Deception, a fifth degree felony, for fraudulently submitting a loan application to purchase the Shaker Heights home for $625,000, and receiving $20,000 in loan proceeds from Nehkayvah Enterprise Inc, a mortgage/real estate company owned by Israel and Jeffrey St. Martin, both whom were indicted in the Shaker Heights case, and are awaiting trial which is scheduled for January 15, 2008.
Daniel, 39, of Cleveland, pled to one (1) count of Falsification, a first degree misdemeanor, for participating in a scheme to obtain credit for Burke who needed good credit to purchase the Shaker Heights house. Daniels will pay full restitution of $10,000 for the monies received as a result of his participation.
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In the Solon case in January 2007, 9 defendants were indicted on forgery and theft offenses, telecommunications fraud, and engaging in a pattern of corrupt behavior. Three loan officers at two mortgage brokers, a developer, a title company and its owner, and a buyer and seller engaged in a fraudulent scheme to purchase homes in Solon, Pepper Pike, and Cleveland.
Eloise Anderson, 59, of Richmond Heights, who makes approximately $55,000 a year, bought four homes with loans worth about 1.3 million dollars between May 2005 and September 2005. By falsifying her income substantially, she obtained loans for 35675 Sedge Circle in Solon for $490,000, for 2485 Lander Road in Pepper Pike for $650,000, and two loans in Cleveland, one for 3606 West 45th Street for $81,000 and another for 4081 East 64th Street for $115,000.
County Home Mortgage of Ohio, by its owner James Sims III, of Las Vegas, and Premier Mortgage Funding of Ohio, by it owners, Floyd Patterson, 50, of Shaker Heights, and Frederick Watkins, 43, of Shaker Heights, along with Regency Title, owned by Shirley Rodgers, 70, of Independence, assisted in these schemes. Furthermore, the brokers got $85,000 in kickbacks and Eloise Anderson received checks totaling $45,000, all of which were written by Rodgers of Regency Title. Edward Emery, 51, of Solon, who operated construction businesses, was also involved the scheme. These illegal transactions came to light through the investigation of the Solon Police Department and the Prosecutor's Office when neighbors of the $490,000 home in Solon became suspicious after observing that no one appeared to be living there.
Eloise Anderson and Edward Emery's sentencing is scheduled at 10am on November 27, 2007 in Judge Eileen A. Gallagher's courtroom. Both pled guilty to theft offenses on October 31, 2007.
In the Shaker Heights case in February 2007, 8 defendants were indicted on theft and forgery-related offenses. Ayanna Israel, 29, of Middleburg Heights, owned a house at 21999 Shelburne Road. In the fall of 2003, Israel rented (with an option to buy) the house to William Daniel, 39, of Cleveland. Daniel, with the assistance of Artist White, 47, of University Heights, who was acting as his broker, wanted to buy the house, but Daniel did not have good credit. Israel's live-in boyfriend and business partner, Jeffrey St. Martin, 33, of Middleburg Heights, knew that Renita Burke, 44, of Euclid, had a better credit rating and assisted her in buying this house from Israel for $625,000 on December 31, 2004. Burke then signed a deal with Daniel that granted him the option to buy the house while he continued to live there.
Israel also acted as Burke's mortgage broker to find a lender to finance a loan of $550,000 needed to close the purchase. Israel and Burke knowingly submitted a fraudulent loan application that inflated Burke's income, misrepresented her assets, and falsified her employment by stating that she owned Burke Interior, a legitimate company, when in fact she had no connection with this company. At the time Burke applied for this loan, she was earning about $15 an hour before she lost her job. For those who assisted in this scheme, Daniel received $10,000, White $18,000, Burke $20,000, the mortgage broker firm, Dana Capital Group, where Israel worked before she was discharged, received a $5,000 commission. Each of these parties was indicted.
Based on this fraudulent application, People's Choice Home Loans, of California, loaned Israel $550,000. To cover the balance of the $625,000 price, Burke was supposed to make a down payment of $70,000. However, St. Martin, Israel and others created a fake paper trail, making it appear to the lender that the $70,000 had been deposited with the title company, Regency Title, owned by Shirley Rodgers, 70, of Independence, to complete the deal. But this money was never part of the transaction; this fake deposit was hidden from the lender.
Rodgers' title company, which received a fee for this fraudulent deal, along with Carla Phillips, 29, of Cleveland Heights, and her company, Blue & Son Contracting, of Cleveland Heights, were involved in this fraudulent down payment scheme as third party payment providers. Phillips received $500 for her part in the scam. All of the players in this down payment scam were charged. Prosecutor Mason has also charged Rogers and her company for similar conduct in one of the cases filed in early January.
This scam unraveled when Burke became angry with William Daniel's failure to move out when he stopped paying his rent and changed the locks a few months after Burke bought the house. Upset, Burke filed a complaint with the Shaker Heights Police, and when a Shaker Heights detective investigated her compliant, he uncovered the scam. The house went into foreclosure.