Wednesday, April 04, 2007

Federal Lawsuit Filed In Alleged Johnston County Mortgage Fraud Scam

(Right) Attorney Robert A. Spence Jr., and his law firm Spence & Spence, are among those named in a federal lawsuit alleging they conspired to commit a mortgage fraud scam against a Virginia woman starting in 2003. (Below) A home off Campground Road in Selma is one of 10 homes in Johnston County allegedly involved. The house, purchased by Dawn Higgins, ended up in foreclosure and now has new owners.

A federal lawsuit has been filed against a number of business owners and individuals in an alleged Johnston County mortgage fraud scam, and WMPM News has confirmed the SBI is now conducting their own separate investigation. The scam allegedly uses inflated appraisals and forged mortgage documents to obtain loans for more than what homes are actually worth. Named in the lawsuit include the Spence & Spence law firm, attorney Robert A. Spence Jr., Spencer Jenkins and Mark Lowery with JP Services, Greg and Elizabeth Johnson with Homes by Greg Johnson, Inc., paralegal Patsy Narron, Eldon and Elizabeth Standridge, loan officer Annetha Dunn, Sybil Pickard, Carol Grice Daniels, appraiser Rodney Taylor, and Fremont Investments & Loan Inc. of Florida.

The federal complaint was filed by attorney Belinda Sukeena on behalf of Dawn Higgins of Virginia . In 2003, Higgins was allegedly solicited by JP Services to invest in real estate in Johnston County . Higgins, an “unsophisticated investor”, had previously only purchased a home for personal use, and was apparently targeted because of her good credit, according to court documents filed by attorney Belinda Sukeena. Higgins traveled to Johnston County and looked at several homes which she was told she could buy at below market prices, which would have immediate and substantial equity, and was allegedly told she would not have to pay any money at closing. The “solicitors” claimed they had tenants to lease the property, covering the expenses until the homes could be sold in the future at a profit. Armed with Higgins’ personal information and a power of attorney, 10 homes were purchased in her name although she allegedly was only told about five of the transactions. In the end, mortgage lenders foreclosed on the properties, renters were evicted, and Higgins’ credit was ruined.

Spence and Spence reportedly employed the attorneys and staff who represented Higgins at all ten closings, the lawsuit contends. Loan officer Annetha Dunn is accused of processing mortgages for all 10 properties. The complaint alleges Patsy Narron was a “key co-conspirator working closely with the (defendants) and loan officer.” Rodney Taylor provided the appraisals for 9 of the 10 properties, and 6 of the 10 were sold by the Johnson’s and Homes by Greg Johnson, the 37-page complaint alleges. The Standridges allegedly sold three properties. Carol Daniels sold the remaining property to Higgins, the federal lawsuit contends. The complaint alleges many of those involved knew or should have known, but failed to disclose to the buyer, the properties were worth less than the sales price. Higgins was reportedly never notified JP Services was allegedly paid a kick-back of 10 to 20 percent commission, or that the lender was under the belief Higgins was making a down payment on the homes. Patsy Narron allegedly produced two settlement statements for each closing, one that showed JP Services assignment fee and another that did not. After closing on the property, the “solicitors” in the case failed to pay the mortgages on the property, even for properties they were receiving rents, thus ruining Higgins credit, according to Sukeena. Higgins attorney said the scam cost her client tens of thousands of dollars in legal fees, in addition to destroying her credit worthiness. The lawsuit was filed in US District Court. According to the FBI, mortgage fraud is the fastest growing white-collar crime in the United States .


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