Homebuyer pleads guilty in mortgage fraud case
L.A. man charged with participating in conspiracy to inflate price of house in Waxhaw to get higher mortgage.
The first homebuyer has agreed to plead guilty in a growing mortgage fraud case involving expensive Union County homes.
Charles Harris Mathis Jr., a Los Angeles business owner, was a "straw buyer" for Mortgage Fraud Cell No. 2, according to federal court documents filed last week. He faces up to five years in prison and a fine of $250,000 for one felony count of mortgage fraud conspiracy on a deal that inflated the price of a Waxhaw house by $444,000.
Participants in the fraud ring agreed to buy houses at one price from builders and then arranged buyers such as Mathis at a higher price, according to court documents. They lied to get mortgages at the higher amount and then shared the difference, court documents say.
On Feb. 23, 2007, Mathis paid almost $1.5 million for a house in Waxhaw's Woodhall subdivision, according to county and court records. A year later, the house went into foreclosure, as often happens in such frauds. The house resold last summer for $559,000, a loss of almost $1 million, according to Union County records.
Mathis could not be reached at his California business, Peak Performance Transportation. His Charlotte attorney, former prosecutor Brian Cromwell, said the firm provides transportation for people with special needs. Cromwell, with Parker Poe, declined to comment on why his client entered a guilty plea or how he came to buy a house across the country from where he lives.
"That will come out during sentencing," Cromwell said.
The Mathis case is linked to another participant in cell No. 2.
He bought the house from Todd and Jennifer Jackson. Neither is charged in his deal. But last month, Jennifer Jackson entered a guilty plea to felony mortgage fraud conspiracy on the July sale of a different Waxhaw house.
In that case, the seller was Jackson Custom Homes, which prosecutors called a small Union County builder of custom homes. Jennifer Jackson was described in the court case as an owner and operator of the firm. Both she and her husband signed the deed, filed with the county for the sale, as the firm's managers. Prosecutors have not filed charges against him. The U.S. attorney's office declined to say why he has not been charged.
Jennifer Jackson's attorneys say building was not her primary career, and that she will not renew her contractor's license this year. They would not identify her career. State records indicate she is a registered nurse.
In August, Jennifer Haynes Jackson renewed her license with the N.C. Board of Nursing, said David Kalbacker, the agency's spokesman. A question on the renewal form asks whether the applicant has "any charges pending whatsoever that have not been previously reported to the board." Jackson checked no, Kalbacker said.
Prosecutors declined to say whether they began discussing charges with Jackson before the August renewal date. Her employer was listed as the pediatric cardiology unit of Sanger Heart & Vascular Institute, at Carolinas Medical Center in Charlotte. The hospital, the flagship of the Carolinas HealthCare System, confirmed Jennifer H. Jackson works in that unit of the heart clinic.
Kalbacker said the board was unaware of Jackson's mortgage fraud case and would likely review the court records and talk with her. He said such cases are evaluated on an individual basis and disciplinary measures can range from probation to license revocation.
Last month, Jackson, wiping away tears, entered her guilty plea in federal court. She faces a maximum of up to five years in prison and a $250,000 fine.
One of her Charlotte attorneys, Nathan Taylor, has previously said his client "deeply regrets being dragged into this conduct and has accepted responsibility for her minor role."
The buyer, Mathis, is the 13th person who has agreed to a guilty plea in the "Waxhouse Investigation" in which prosecutors have identified five mortgage fraud cells operating in 2006 and 2007 in Mecklenburg and Union counties. The first plea agreement came more than a year ago.
Home sale prices in the cases were generally inflated by $200,000 to $500,000.
The 12 people who have previously agreed to plead guilty include lawyers, builders, a real estate agent, a loan officer, a paralegal and a notary public.
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Along the same vein:
New charges brought in '01 mortgage fraud case
Man tied to scheme involving 11 home loans in Charlotte area, documents say.
A man who fled prosecution more than seven years ago in a Charlotte mortgage fraud case has been arrested and faces new federal charges.
Patrick Corvo, 46, was originally apprehended in June 2001 in New Hampshire in connection with a Charlotte scheme that tied him to "eleven fraudulent home loans" in 1999, according to court documents. He was indicted on charges of mail and wire fraud and faced decades in prison, if found guilty.
During a hearing in New Hampshire, the judge directed Corvo to appear in court in North Carolina. The judged advised him that not showing up would be "another federal crime" that could add two years to his sentence, according to court documents.
"Like the dumbest move in the world not to show up," he said. "Really stupid."
The next month, Corvo appeared in federal court in Charlotte, as directed. He was released on the same conditions. The trial was delayed several times at Corvo's request.
He "allegedly suffered a back injury" the day before one court date, according to court documents. Corvo was declared a fugitive after failing to appear for trial in September 2002.
The alleged Charlotte scheme had the characteristics of a common mortgage fraud.
Corvo recruited "straw buyers" for foreclosed or inexpensive houses that were located by co-conspirator David Roberts, who acted as the seller, Realtor or broker on most of the deals, according to documents. Buyers were told rental payments would cover the mortgages while the houses were remodeled, then resold, and the proceeds shared. Roberts, now 47, and Corvo lied to get loans in the buyers' names, documents said.
Corvo collected rent but never paid the mortgages and the properties fell into foreclosure, with a loss to lenders of about $1.2 million, according to documents.
Roberts, the co-conspirator who also faced a lengthy prison term, "provided significant intelligence" to build the case against Corvo, documents said. As a result, prosecutors recommended a lighter sentence. He was given five months and ordered to pay restitution in excess of $300,000.
Corvo was arrested last year in Canada while attempting to cross the U.S. border, according to people familiar with the case. On Dec. 30, he was committed to Mecklenburg County jail pending trial. Additional charges include failure to appear and obstruction of justice.
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