Also in 2003, Whoolery recruited Jeannette Gray, a licensed appraiser, and his own sister, Kimberly Baldwin, to join the conspiracy. Gray, for $4,000 a month, agreed to allow Baldwin to prepare appraisals for First Capital and to sign Gray’s name to the appraisals as if Gray prepared the appraisals. The appraisals, however, were not just fraudulent because they falsely represented that a licensed appraiser prepared the appraisals but also because the appraisals overstated the values of the properties serving as collateral for the loans. Baldwin, like Cowden, also substituted pictures of properties.
In 2004, Gray stopped authorizing First Capital’s use of her license. At that point, Whoolery recruited another appraiser, Jason Sheraw, to join the conspiracy. Similar to Gray, Sheraw, in exchange for $4,000 per month, agreed to allow Baldwin to prepare appraisals under his license as if he were actually preparing the appraisals. Baldwin then began to prepare her fraudulent appraisals for First Capital under Sheraw’s name. Between 2003 and 2007, Baldwin prepared hundreds of fraudulent appraisals for First Capital, resulting in the funding of tens of millions of dollars of fraudulent loans.
Whoolery supervised loan officers who submitted loans using the fraudulent appraisals, including Lawrence Kraynak, Daniel O’Connor, Mark Hipsley, John Polosky, Daniel Gillen, Shawn Cupp, Elizabeth Drake, and others. The submissions to the lenders, however, were not just fraudulent because of the appraisals. Rather, the submissions to the lenders also often included representations that overstated the borrowers’ financial conditions, including their incomes and assets. Whoolery and the loan officers also often submitted fake documents in support of those false representations, including fake paystubs and bank statements. Cowden, Kraynak, O’Connor, Hipsley, Polosky, Gillen, Cupp, Drake, Gray, Sheraw, and Baldwin have all been convicted of mortgage fraud related offenses.
In total, the government estimates that the fraudulent submissions related to this scheme led to the funding of more than $100 million in fraudulent loans, making this case the largest mortgage fraud case ever to go to trial in the Western District of Pennsylvania. The law provides for a total sentence of 20 years in prison, a fine of $250,000, or both. (usattywdpa12913)
Busy little beavers, weren’t they? Now 11 stand convicted. With a potential loss of $100 million I would say that Whoolery is looking at a lot of prison time.
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