Md. Couple Indicted In Fraud Probe
Friday, June 13, 2008
Federal authorities charged a Prince George's County couple yesterday with running a $35 million foreclosure rescue operation that duped lenders and unsuspecting homeowners facing foreclosure in what prosecutors described as one of the largest mortgage fraud schemes in Maryland history.
Joy Jackson, president of Metropolitan Money Store of Lanham, and her husband, Kurt Fordham, were arrested yesterday in North Carolina, U.S. Attorney Rod J. Rosenstein said at a news conference at U.S. District Court in Greenbelt. Jackson, 40, and Fordham, 38, are charged with conspiracy to commit mail and wire fraud, six counts of money laundering, and 15 counts of mail fraud to obtain money and property from homeowners and lenders.
In a 25-count indictment unsealed yesterday, prosecutors allege that Jackson and Fordham, both of Fort Washington, and six other defendants used money from the elaborate scheme to pay for a lavish lifestyle that included luxury cars, houses, jewelry, fur coats and travel. The indictment also mentions Jackson and Fordham's wedding at the Mayflower Hotel, where Patti LaBelle sang and 360 guests ate lobster and shrimp and drank Cristal champagne. Jackson told friends that the wedding cost nearly $800,000.
"This is one of the largest schemes of its type that we've seen," Rosenstein said. "It's an extraordinarily important case for us."
Prosecutors said Metropolitan Money Store preyed on homeowners facing foreclosure. The company would allegedly use a "straw buyer" to purchase a home and tell the owners that they could continue living there and then buy it back after a year. But Metropolitan would allegedly borrow as much as possible against the value of the home, siphoning off the equity and making it impossible for the former owners to buy it back.
Thomas E. Perez, secretary of the Maryland Department of Labor, Licensing and Regulation, said the Metropolitan case showed "the need for legal and regulatory changes on the state level. . . . "We had many of this nature, but not of this magnitude," Perez said. "This was the poster child."
Angele Reid, 63, of Oxon Hill is one of the homeowners who sought help from Metropolitan. "She put me at risk so she could live the good life," Reid said of Jackson. "I just hope they are put away for a long time so they can't do it to someone else."
In addition to Jackson and Fordham, the indictment names Jennifer McCall, 46, her husband, Clifford McCall, 47, and a daughter, Chandra Jones, 30, all of Lanham; Wilbur Ballesteros, 32, of Lanham; Fordham's sister, Katisha Fordham, 35, of the District; and Ronald Chapman, 33, of the District. All face mail and wire fraud charges. The McCalls and Jones are also charged with one count each of money laundering.
The charges carry a maximum of 30 years in prison and a $1 million fine for each of the mail fraud counts. Jackson and Fordham were being held in Raleigh, N.C., yesterday for a preliminary hearing. The other defendants, except Chapman, had initial court appearances in Greenbelt. Chapman was being sought yesterday, authorities said.
According to the indictment, the defendants, as part of the scheme, told desperate homeowners that Metropolitan Money Store and companies headed by Fordham and Clifford would help them repair their damaged credit before giving them back the titles to their homes.
The indictment also says the defendants fraudulently bolstered the credit of the straw buyers to qualify for mortgages and paid them $10,000 to participate in the scheme. After obtaining inflated loans on the properties, the defendants stopped making mortgage payments, which resulted in the homes going into foreclosure, federal officials said.
"The alleged actions of those indicted fed on people pursuing the American Dream, turning those dreams into an American Nightmare," FBI Special Agent Amy Lyons said.
The Maryland labor and licensing department, which is credited with alerting federal officials to the scheme, began investigating Metropolitan in November 2006 after receiving complaints from homeowners.
Maryland Gov. Martin O'Malley (D) applauded the investigation that led to the indictments. The state worked with the FBI, the U.S. attorney's office, the Secret Service and the Internal Revenue Service on the case.
The "indictment illustrates that by working together with the federal government, we can bring to justice those who exploit Maryland homeowners, and we can do more to preserve homeownership in Maryland," O'Malley said in a statement.
Last year, homeowners filed a class-action lawsuit against Metropolitan in federal court. According to that suit, as many as 400 people in Maryland, Virginia and the District were defrauded by Jackson's company.
"For those homeowners who have lost their homes, it's been pretty challenging while this all this stuff has been worked out," said Phillip Robinson, an attorney for plaintiffs in the lawsuit.