Maryland Feds Bag Two Guilty Pleas In Alleged "MKL Financial Diet" Equity Stripping, Sale Leaseback, Foreclosure Rescue Scam

From the Office of the U.S. Attorney in Maryland:

• Cheryl Brooke, age 52, of Upper Marlboro, Maryland, and Winston Thomas, age 43, of New Carrollton, Maryland pleaded guilty [Monday] to their participation in a scheme(1) in which they offered to help financially-vulnerable individuals save their homes from foreclosure, and instead defrauded homeowners and mortgage lenders, announced United States Attorney for the District of Maryland Rod J. Rosenstein.

***

• Thomas, who was then a senior loan officer with a mortgage lender, and Brooke specifically targeted individuals who owned and had equity in their homes, but were facing foreclosure on their homes because of their inability to make monthly mortgage payments. The defendants fraudulently represented to the homeowners that their “ lease/buy-back program” would help the homeowners to keep their homes. The homeowners were told that the “good credit” of another co-conspirator would be used to temporarily refinance their homes, that they had to sign their homes over to such co-conspirator and that they could repurchase the homes in roughly one year, or once they regained their financial footing. During the interim, they could remain in their homes by paying “rent” and fees to the co-conspirator by having their bank accounts directly debited by an account belonging to Brooke’s company “In the House Technologies” (IHT). Brooke allowed the IHT account to be used to deposit the proceeds of the equity-stripping scheme.

For the entire press release, see Senior Loan Officer and Conspirator Plead Guilty in Mortgage Fraud Scheme That Targeted Victims Through Local TV Ads (Defendants Agree to Forfeit Over $2 Million).

For the Statement of Facts contained in the Defendants' guilty pleas, see:

• U.S. v. Thomas,
• U.S. v. Brooke.

(1) The alleged scheme was referred to as the "MKL financial diet" purportedly headed by Michael K. Lewis, who is also currently under indictment. See Michael K. Lewis and Three Others Indicted in Mortgage Fraud Scheme - Allegedly Targeted Victims Through Local TV Ads.