Louisiana Feds Get Guilty Plea In Straw Buyer, House Flipping Scam

The Times -Picayune reports:

• "As part of a plea deal with the government, Calvin Davis admitted to three felony charges: conspiracy to commit mail fraud, filing false loan paperwork and income tax evasion. He is scheduled to be sentenced Nov. 8. [...] Davis is the sixth person to plead guilty to charges related to the "house flipping" scam. His guilty plea comes on the heels of the recent grand jury indictment of Michael O'Keefe Jr., owner of Citywide Mortgage Co. and son of former state Sen. President Michael O'Keefe. Michael O'Keefe Jr. was indicted June 18 and is accused of defrauding the federal government into guaranteeing $600,000 in Citywide loans to unqualified borrowers."

Davis admitted to purchasing blighted or run-down properties and obtaining fraudulent appraisals that boosted the homes' values after minimal repairs were made. Straw buyers were then recruited by him to purchase the houses at their inflated prices. Phony employment and credit documents and tax returns were used to dupe mortgage lenders into providing the straw buyers with financing. Three of the straw buyers -- Timothy Falls, Dennis LeBlanc and Dennis Addison -- admitted in court to lying about their income, credit and the value of the houses they intended to buy and a fourth participant, Robert Green, pleaded guilty in April to charges that he prepared the false tax returns. Michelle Cochran, an underwriter for Citywide Mortgage, pleaded guilty to approving the fraudulent applications.

For more, see Abuse of loan program admitted (False information was filed with HUD).

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