W. Texas Feds Score Conviction In Flipping Scam Targeting Home Sellers w/ Phony Foreclosure Rescue Promises, Homebuyers w/ Bogus Owner Financing Deals

From the Office of the U.S. Attorney (Midland, Texas):

• United States Attorney John E. Murphy announced that in Midland [], a federal jury convicted 34-year-old Marcus Rosenberger in connection with an estimated $190,000 fraudulent real estate scheme. Rosenberger was convicted of one count of conspiracy to commit mail and wire fraud, one count of mail fraud and ten counts of wire fraud.
• For approximately one year beginning in March 2009, Rosenberger and 35-year-old Jason Heath Morrison of Midland, operated a real estate investment venture under the company name of Vanguard Properties which focused on property "flipping."
• Jurors found that during the conspiracy, Rosenberger and Morrison identified at least ten properties that were in residential foreclosure and scheduled to be sold at auction within weeks. They approached owners with a plan to avoid the consequences of foreclosure and preserve the owners’ credit ratings by relinquishing the property to the defendants.
• In exchange for relinquishing the property, the defendants promised to pay off the existing property lien. Unbeknownst to the property owners, Rosenberg and Morrison never paid the existing liens. Instead, they placed ads in the Midland Reporter Telegram to sell the property under an owner-finance agreement.
• They concealed from the buyers the fact that the properties had existing liens. The buyers made down payments–$5,000 to $10,000–and made subsequent monthly payments to the defendants.
• The homes ultimately went into foreclosure on the undisclosed liens and were sold at auction. The original homeowners were left with a foreclosure on their credit and the new buyers, without homes and the money they paid for the houses.
• In January, Morrison pleaded guilty to the same charges.(1) Both Morrison and Rosenberger face up to 20 years in federal prison per count and restitution. Morrison is scheduled to be sentenced on May 26, 2011; Rosenberger, June 29, 2011.
• This investigation was conducted by the Midland Police Department. Assistant United States Attorney Austin Berry is prosecuting this case on behalf of the Government.

For the U.S. Attorney press release, see Federal Jury In Midland Convicts Odessa Man In Connection With Real Estate Fraud Scheme.

(1) Regarding Morrison's January guilty plea, the press release is silent as to whether he scored a 'squeal deal' with the Feds, where he would agree to finger Rosenberger at trial for the latter's role in this racket in an attempt to 'buy down' some prison time to be handed out at a future sentencing hearing.