Texas Straw Buyer Scammer Convicted

Vernon Cooks, Jr. a/k/a Jibreel Rashad was convicted on all counts of a federal indictment (one count of bank fraud, seven counts of wire fraud, and six counts of money laundering) that charged him with operating a mortgage fraud scheme in the Dallas area, according to the U.S. Attorney's Office in Dallas.

One other co-defendant who was involved in the same scheme has pleaded guilty and is awaiting sentencing. Co-defendant Deirdre Dione Anderson, who was charged with six counts of wire fraud, was acquitted.

The fraud scheme involved was your basic straw buyer scam involving:

• Recruiting and paying straw buyers to use their names and credit to purchase homes that Cooks was going to rent to others,
• Promises that Cooks would pay all closing costs, mortgage payments and taxes associated with the properties until he transferred them out their names, within six months to a year after closing,
• Use of bogus appraisals to support the inflated sales prices of the homes,
• Use of fraudulent loan applications and other supporting documents, including fraudulent tax returns, W2s, and employment, rent and deposit verifications, to be submitted to the mortgage lenders so that the straw borrowers would qualify for the inflated loans,
• Use of the fraudulently-obtained proceeds to pay off the original, bona-fide sellers, keeping the rest of the money for himself,
• Ultimately defaulting on the mortgage loans in the straw buyers’ names, thereby leaving them stuck "holding the bag."

Source: U.S. Attorney Press Release, Federal Jury Convicts Real Estate Investor In Mortgage Fraud Scheme.

For story update, see Co-defendant in City Hall case sentenced in mortgage fraud (Dallas: House flipper gets 11 years in jail, denies wrongdoing) (The Dallas Morning News - 10-19-07).