WASHINGTON—Rasheeda M. Canty, a former mortgage broker, has been sentenced to a one-year prison term for her role in an extensive mortgage fraud scheme involving properties in the District of Columbia and Maryland, announced U.S. Attorney Ronald C. Machen, Jr.; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office; and Daniel S. Cortez, Inspector in Charge of the U.S. Postal Inspection Service, Washington Division.
Canty, 38, of Upper Marlboro, Maryland, pled guilty in September 2009 to conspiracy to commit fraud. She was sentenced on February 24, 2012 by the Honorable Richard J. Leon. Upon completion of her prison term, Canty will be placed on five years of supervised release. The judge also ordered her to pay $339,643 in restitution. Canty also must forfeit $342,572, which represents the amount of commissions she received from lenders on the fraudulent transactions.
As part of her plea agreement, Canty agreed that the scheme led to losses of at least $1 million.
According to the statement of offense filed by the government, to which Canty agreed, Canty was a mortgage broker with an office in Lanham, Maryland. As part of her job duties, Canty completed and filed, often by mail or interstate wire transactions, loan applications to financial institutions on behalf of individuals involved in real estate transactions.
Over a two-year period starting in about April 2005, Canty and others conspired to defraud financial institutions whose deposits were insured by the FDIC for the purpose of influencing the financial institutions to approve mortgage loans. She and others perpetrated this scheme by identifying distressed homeowners whose properties in Washington, D.C. and Maryland were facing imminent foreclosure and offering to purchase their properties.
The conspirators told some of the homeowners that they could repurchase their properties within one year. Canty prepared fraudulent letters to have derogatory information deleted from the sellers’ credit reports so that their credit scores would be increased, thus allowing the sellers to qualify for the re-purchase of their properties. The conspirators then sought unsophisticated individuals, with good credit scores or credit scores that could be fraudulently raised, to act as “straw purchasers,” also known as “credit partners,” for these transactions, often in exchange for a $5,000 to $10,000 fee to the straw purchaser for the use of his or her personal information to purchase the respective property. The straw purchasers understood that one of the conspirators would make the monthly mortgage payments, and the straw purchaser would not be otherwise financially responsible for the property or required to live there. On some occasions, the conspirators used the identification of innocent, unknowing victims to make these purchases.
In furtherance of the conspiracy, Canty obtained financial information from the straw purchasers which she then falsified in order to qualify the applicants for their mortgage loans. Primarily, she inflated the straw purchaser’s income, so it would decrease the debt-to-income ratio for a more favorable rate and loan approval. Canty knowingly falsified the loan applications in a number of ways, including, among others, inflating the gross income of the applicant, falsifying rental verification documents, and falsifying, often with fraudulent documents obtained from other conspirators, the job position of the applicant.
In the course of this scheme, Canty obtained loans from at least 11 lenders to which she had knowingly submitted fraudulent information.
Canty benefitted from these transactions by charging a large fee, usually five percentage points of the purchase price, on these transactions. Her commissions from lenders to which she had submitted fraudulent information was approximately $342,572. The conspirators benefitted from this scheme, in among other ways, by skimming equity from the properties, often after inflating the appraisals, and charging excessive brokerage fees. As a result of these transactions, several of the properties have gone into foreclosure.
The investigation of this case was conducted by the FBI’s Washington Field Office and the Postal Inspection Service, with assistance from numerous federal and local agencies, including the Internal Revenue Service-Criminal Investigation (IRS-CI), Metropolitan Police Department (MPD), and the D.C. Department of Insurance, Securities and Banking.
In addition to Canty, five people have been convicted of charges in the investigation.
In announcing the sentence, U.S. Attorney Machen, Assistant Director in Charge McJunkin, and Inspector in Charge Cortez praised the work of the investigative agents from all of the agencies involved in this matter. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Legal Assistant Jared Forney, as well as Assistant U.S. Attorneys Daniel Butler, who is prosecuting this matter, AUSA Diane Lucas, who assisted in the forfeiture action, and Tejpal Chawla, who assisted in the prosecution.