Fraud and Prevention

Two More Sentenced in Metropolitan Money Store Fraud Scheme

By James Comtois
September 23, 2009

Two more defendants in the Metropolitan Money Store case have been sentenced, according to the U.S. attorney's office for the District of Maryland.

U.S. District Judge Roger W. Titus sentenced Richard Allison, an attorney and employee of the U.S. Census Bureau from Camp Springs, Md., to 18 months in prison, followed by five years of supervised release for conspiracy to commit mail and wire fraud, in connection with a mortgage fraud scheme which falsely promised to help homeowners facing foreclosure keep their homes and repair their damaged credit.

Judge Titus also sentenced co-conspirator Carlisha Dixon of Hyattsville, Md., to five months in prison and five months home detention, followed by five years of supervised release. Judge Titus also entered Dixon to pay $180,000 in restitution and deferred restitution for Allison pending a hearing on Oct. 7 to determine the amount.

According to Allison's plea agreement, Lanham, Md.-based MMS hired Allison to provide legal services to MMS, which offered foreclosure consultation and credit services to financially distressed homeowners; the Fordham & Fordham Investment Group Ltd., a foreclosure consulting and credit servicing business based in Lanham and Greenbelt, Md.; Burroughs & Smythe Financial Services, another foreclosure consulting and credit servicing business; and several individual officers of the companies.

Beginning in March 2006, Allison conspired with company officers to fraudulently promise to help homeowners, who had substantial equity in their homes but were facing foreclosure because of their inability to make monthly mortgage payments, avoid foreclosure and repair their damaged credit. The homeowners were directed to allow title to their homes to be put in the names of straw buyers for a year, during which time MMS promised to improve the homeowners' credit ratings, help them obtain more favorable mortgages, and eventually return title to their homes to them.

The homeowners were told that the equity withdrawn from the properties would be used to pay the mortgage and expenses on their homes and to repair their credit. The straw buyers were paid $10,000 to participate in the scheme.

Using the homeowners' properties, the conspirators applied for mortgages to extract the maximum available equity from the homes. They prepared and submitted fraudulent loan applications to mortgage lenders to obtain fraudulently inflated loans on the target properties in the straw buyers' names.

At settlements, the conspirators imposed numerous fees and required "seller contributions," which were far in excess of industry standards; they imposed fees for services which were not performed, disclosed or explained to the homeowners; and they transferred the sale proceeds out of the escrow accounts into the conspirators' business and personal bank accounts and converted a substantial portion of those funds to their personal use.

Allison agreed to act as a straw buyer and secure mortgage loans in his own name for two homeowners whose properties were located in Fredericksburg, Va., and Washington, and in return was paid $10,000 for each property. Allison made false statements as to personal and financial information on a mortgage loan application and settlement documents.

According to Dixon's plea agreement, Dixon served as a straw buyer for two properties in Maryland: one in Temple Hills and another in Hyattsville. In return, she was paid $10,700. Her co-conspirators also paid Dixon's mortgage on her personal residence several times, which was $2,200 per month, Dixon's airfare and hotel expenses for a trip to Miami, a rental car and a refrigerator.

Dixon further participated in the scheme when in May 2006, she was hired to run Burroughs & Smythe, which assisted the MMS in offering foreclosure consultation and credit services to financially distressed homeowners, even though Dixon had no prior background in credit repair or financial services. Dixon was paid $1,300 every two weeks.

During the course of her employment from May 2006 to March 2007, Dixon, along with co-conspirators Clifford McCall and Jennifer McCall, deposited at least $1,553,152 into the company's bank accounts, some of which was used to pay personal expenses of Dixon's co-conspirators.

Dixon fraudulently signed multiple verifications of rent or employment listed in the names of straw buyers, and falsely confirmed a straw buyer's rent or employment when a lender would call to verify the information. Dixon also obtained cashier's checks drawn on Burroughs & Smythe bank accounts in the names of straw buyers and MMS employees to facilitate the conspiracy and scheme to defraud.

A total of 10 defendants have pleaded guilty in this scheme.