Cary McEntee, 58, of Virginia Beach was charged with conspiracy to commit mortgage fraud. McEntee and his co-conspirators set up a scheme in Michigan, creating fraudulent real estate transactions using ‘straw buyers’ during 2006 and 2007. (A straw buyer is a person who buys something on behalf of someone else in order to circumvent legal restrictions to enable fraud.) McEntee pled guilty to the charges.
The straw buyers were paid to pose as a borrower and apply for a mortgage loan. After the loan was made, the proceeds were then given to the conspirators for their own use. McEntee and his co-conspirators falsified income and asset information to obtain the loans.
The loans went unpaid, the properties went into foreclosure and the lending banks lost millions. McEntee agreed to a plea deal, in exchange for a more lenient sentence and presently out on bail. Conspiracy charges can carry a maximum of five years in prison and three years of supervision after release, a fine and restitution.
Meanwhile, in California -
Akbar Bhamani, 61, who was the head of a real estate investment firm, was sentenced to 4 years in prison for cheating investors in another mortgage scheme. Bhamani promised his investors that deeds of trusts would be secured on properties.
Bhamani was the founder and Chief Executive Officer (CEO) of his family-owned business, “Heaven Investment Holding Corporation”. Bhamani and his employees would find investors to participate in their special program, Tenants in Common (TIC Program). The TIC program would use the money from investors to develop properties, most notably, a hotel in Oakland, CA.
The Heaven Investment Holding Corp. sold fractionalized ownership interests to investors in these properties. The fractionalized interests qualified as securities. Bhamani never registered them with the federal Securities and Exchange Commission (SEC). Investors lost almost $7 million.
And in Alabama -
Kinard Henson, 43, was sentenced to 17 years in prison for conspiring to defraud financial companies, launder stolen funds in a $15 million, multi-state mortgage fraud scam and attempted murder of a witness. Kinard also used straw buyers.
Kinard and his co-conspirators would find overbuilt oceanfront condos from distressed developers and would negotiate a buyout price. They would conceal the true sales prices through inflated sales contracts bought by the straw buyers.
In Henson’s case, federal law enforcement agents subpoenaed documents in connection to one of the straw buyers. When Henson found out, he then contacted another individual to kill that particular straw buyer. The straw buyer, now a witness against Henson survived.
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