Ex-NFL Star Indicted for Mortgage Fraud

FIVE INDICTED IN MORTGAGE FRAUD SCHEME

[HOUSTON, TX] – A licensed Texas attorney and real estate developer, a sports agent, two bank loan officers, and a real estate appraiser have been indicted in a multimillion dollar mortgage fraud scheme, United States Attorney Don DeGabrielle, interim Special Agent in Charge Alex J. Turner of the FBI Houston Division, and Special Agent in Charge Daniel P. Salas of the U. S. Department of Housing and Urban Development announced today.

Jerome Karam, 44, of Friendswood, TX, a real estate developer and licensed Texas lawyer; Dwight Sean Jones, 44, of Beverly Hills, CA, a former NFL player and sports agent; Tommy Jay Trammel, 44, and David Ranostaj, 40, both of Houston and former loan officers with Southwest Bank of Texas, Bank of Houston and Whitney National Bank, and Jay Westrick, 44, of Houston, a real estate appraiser, have been charged in a 12-count indictment for their alleged involvement in a mortgage fraud scheme that allegedly reached every aspect of a real estate loan: seller, buyer/borrower, loan officer, appraiser, escrow officer, and title company. For the full article...

Did You ‘State’ Your Income On Your ‘Stated Income’ Loan?

Well, for those of you who live in Arizona, we hope you did not inflate your income on your loan application. House Bill 2040 – about to be signed by the Governor – makes that a felony in your state. Arizona is among the top 10 states in the number of foreclosures filed this year.

Eric Forster

Metropolitan Mortgage & Securities Collapse

Provided by The Associated Press

A federal jury convicted a former Metropolitan Mortgage & Securities executive of three felonies Friday stemming from a shady real-estate deal that helped hasten the Spokane company’s collapse.

Thomas Turner, 56, is scheduled to be sentenced Oct. 12 before U.S. District Judge John Coughenour.

Turner, former president of Metropolitan’s sister company Summit Securities, was convicted of two counts of making false and misleading statements to accountants of a publicly traded company and one count of material omissions to accountants.

Turner’s is the only criminal prosecution related to the collapse and bankruptcy of Metropolitan, but Joseph Capone, a prosecutor with the U.S. Department of Justice’s fraud section, said Friday that the FBI investigation of Metropolitan is ongoing.

About 16,000 investors lost more than $450 million in Spokane’s largest corporate failure when Metropolitan and Summit sought Chapter 11 bankruptcy protection in February 2004.

Turner testified this week that he warned former Met owner C. Paul Sandifur Jr. and accountants that a proposed 2002 joint venture and real-estate deal with a Bellingham development company was bad.

Prosecutors alleged Turner lied to auditors about the deal to brighten the company’s 2002 financial results, enabling Metropolitan to post immediate gains and report to brokers and investors that the company was profitable when it actually was losing money and may have been insolvent.

Turner’s lawyers attempted to pin the blame for faulty audits on outside accounting giant Ernst & Young. Ernst & Young partner Jack Behrens testified that Turner lied and withheld crucial information about the $24 million transaction.

Investors, the Washington state Office of the Insurance Commissioner and a special bankruptcy trust set up to recover money for investors have sued Ernst & Young for professional negligence.

A call to the firm’s New York office was not answered after normal business hours Friday.

Metropolitan Mortgage & Securities was once a $2.7 billion conglomerate of insurance companies and investment services. Most investors who lost money in its collapse purchased unsecured debenture bonds and have been repaid 6 cents to 9 cents on the dollar.