Denver Real Estate Agent Sentenced to Federal Prison for Mortgage Fraud Scheme

DENVER (LAWFUEL) – Linda Edwards, age 55, of Centennial, Colorado, was sentenced this morning by U.S. District Court Judge Marcia S. Krieger to serve 41 months (3 ½ years) in federal prison for wire fraud, false statements, and false use of a Social Security number, announced Acting U.S. Attorney David M. Gaouette, Special Agent in Charge of IRS Criminal Investigation Christopher M. Sigerson, and Special Agent in Charge of the Office of Inspector General for Housing and Urban Development (HUD) Phyllis Robinson. Following the prison term, Edwards was ordered to spend 3 years on supervised release. She was also ordered to pay restitution totaling $646,521.87, forfeit $139,854.96, which represents the proceeds of her illegal activities, and pay a $1,300 special assessment to a victims of crime fund. Judge Krieger ordered Edwards to report to a facility designated by the U.S. Bureau of Prisons on or before March 9, 2009.

Linda Edwards was indicted by a federal grand jury in Denver on February 17, 2005. She was found guilty following a jury trial on July 25, 2008. She was sentenced today, February 6, 2009.
According to the indictment, as well as evidence presented during her trial, Linda Edwards worked as a real estate agent doing business as “Affable Realty,” which was located in Aurora, Colorado. She used her business to further her mortgage fraud.

Starting in March 1999 through July 2004, Edwards, aided and abetted by others, devised a scheme to defraud and to obtain money and property by means of fraudulent representations and promises from mortgage companies that funded federally insured loans. As part of the scheme, Edwards and others working with her would locate buyers who desired to purchase a residence but were unable to qualify for a mortgage using the buyers’ accurate credit history, income and employment, and/or other financial information.

The defendant and others working with her would assist the buyers who could not qualify for an FHA-insured mortgage legitimately by one or more of the following means: (i) obtaining a false Social Security number (“SSN”) for the buyer, which would conceal the buyer’s unfavorable credit history; (ii) creating false W-2s or other income documents, which would inflate or wholly create income that would purportedly be available for the buyer to make mortgage payments; (iii) creating false verifications of rent (“VOR”) or employment (“VOE”) to support false information about the buyer; (iv) creating false alternate credit letters, which would create an appearance that the buyer had a history of paying debts timely; and (v) creating false “gift letters,” which falsely stated that the buyer had an appropriate source of funds for the down payment, and/or other false financial information.

“Mortgage fraud has weakened the stability of the housing market,” said Acting U.S. Attorney David Gaouette. “During these difficult economic times, the citizens of Colorado and the nation must have confidence in the financial marketplace. Those who perpetrate this crime must be held accountable.”

“It’s pretty simple, she assisted in implementing a complex mortgage fraud scheme and now she is going to prison,” said Christopher M. Sigerson, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office. “IRS Criminal Investigation is committed to identifying and pursuing individuals who through callous greed have contributed to the decline of our economy.”

“The new Housing Bill rewrote the law on FHA fraud and now carries penalties of 30 years and $1 million in fines,” said Phyllis Robinson, Special Agent in Charge of the HUD Office of Inspector General. “The HUD Office of Inspector General, working with U.S. Attorneys across the country, will use these penalties to bring individuals like Linda Edwards, who are eating away at the economic heart of this country, to justice. We will use whatever means necessary – both Civil and Criminal – to isolate and punish mortgage companies’ leadership and personnel who are corroding the soundness of HUD’s FHA program.”

This case was investigated by the HUD Office of the Inspector General, and the Internal Revenue Service Criminal Investigation Division.

The case was prosecuted by Assistant U.S. Attorneys Patricia Davies and Matthew Kirsch.

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