Kimberly Mackey, 46, of Pittsburgh, Pennsylvania, a licensed title agent and who owned and operated Real Estate One Land Services, Inc. a title business also located in Pittsburgh, has been sentenced to 5 years in prison and ordered to pay over $1.6 million in restitution in connection with a reverse mortgage fraud scheme in Florida for which she used her business to close fraudulent transactions.
Marcos Echevarria, 29, of Palm Beach, Florida, was also sentenced to 2 years in prison last week in connection with the scheme. Louis Gendason, 42, of Delray Beach, Florida, and John Incandela, 24, of Palm Beach, Florida, have also pled guilty to a charge of wire fraud for their involvement in the scheme and will be sentenced in December.
From May 2009 through November 2010, Mackey and her co-conspirators defrauded elderly homeowners, Genworth Financial, and the FHA. Gendason and Incandela, loan officers at 1st Continental Mortgage in south Florida, induced elderly homeowner to refinance into Genworth reverse mortgages. The unwitting borrowers typically did not have enough equity to qualify for reverse mortgages, so Gendason altered real estate appraisals to fraudulently inflate the value of the borrowers properties. The defendants then submitted the fraudulently inflated appraisals to Genworth. Based on the false documentation, Genworth approved and the FHA insured more than $2,572,813 in reverse mortgages.
Mackey, responsible for closing the transactions, then failed to pay off the homeowners' existing mortgage loans, and attempted to conceal the fact by preparing false HUD-1 settlement statements. Nearly a million dollars of this money was illegally diverted to Incandela and Gendason.
Later, Mackey and her co-conspirators tried to disguise the fact that they had failed to pay off the old mortgages. One strategy involved a scheme in which the co-conspirators tried to represent that homeowners were attempting to arrange short sales in order to satisfy the now delinquent loans, in order to forestall a foreclosure. Another strategy was to simply make mortgage payments on the unsatisfied loans. Whatever the strategy, the purpose was to keep the bank and the homeowner in the dark.