A Texas lawyer pleaded guilty to his role in an elaborate $5 million mortgage fraud scheme involving pricey beach homes, according to the U.S. Attorney's Office in Houston.
Kirk Lawrence Brannan ppeared before Chief U.S. District Judge Lee H. Rosenthal and entered a guilty plea to bank fraud in the four-year scheme to defraud Wells Fargo Bank and other lenders.
Brannan remains free on bond pending sentencing on Aug. 29, when he faces up to 30 years in federal prison and a fine of up to $1 million.
Brannan's lawyer, Samuel Dorsey Adamo, declined to comment after the plea hearing.
His co-conspirators Chucoboie Lanier, David Lee Morris and Derwin Jerome Blackshear, all of Houston, previously pleaded guilty to their roles in the beach property scheme. All three are scheduled to be sentenced on Sept. 26.
According to court documents, Brannan sold 10 top-dollar beach homes in the Freeport/Surfside area to straw buyers between 2005 and 2009. The homes sold for two or three times their appraised values. Lanier, Morris and Blackshear recruited straw buyers to submit loan applications listing fake addresses, employers, incomes which the banks relied upon in deciding to offer mortgage loans.
According to their plea deals, the loan applications indicated the buyers were much better credit risks than they actually were. Brannan admitted in his plea that he paid $2.4 million in kickbacks to the fake home buyers each time a beach home mortgage came through for one of them.
Brannan also produced fake settlement documents indicating he had sold three of his properties to his own children at exorbitant prices. The appraisers relied upon these sale documents when appraising the homes he sold to straw buyers.
The straw buyers proceeded to default on the mortgages in every instance, and all 10 beach properties ended up in foreclosure.
The scheme resulted in a $5,317,350 loss to Wells Fargo Bank and other lenders.
