Ralondria Stafford, 36, and Necole Ward, 31, both formerly of Vallejo, Calif., pleaded guilty before U.S. District Judge Morrison C. England Jr., to bank fraud.
According to court documents, from 2004 through 2006, Stafford and Ward, who are sisters, operated RN Realty, a real estate office located in Vallejo, from which they carried out "a scheme to commit mortgage fraud by using straw buyers to purchase properties at inflated prices," said U.S. attorney Benjamin B. Wagner.
Prosecutors say the straw buyers were approached and offered $5,000 for the use of their names, credit histories and financial information. The defendants represented to the straw buyers that the purchases would be in name only and that the properties would be repurchased by Stafford and Ward from the straw buyers in six to 12 months.
With one of the straw buyers, the defendants signed a document called the "The $5,000 Deal" with the terms of the straw buyer agreement.
In August 2005, Stafford and Ward sold a property in Vallejo, owned by Stafford's husband to straw buyer "J.G." This person received a loan based upon information contained in a fraudulent loan application prepared by Stafford and Ward and signed by the straw buyer.
Court documents said this application contained materially false information concerning the straw buyer's income, employment and the purpose of the purchased location as a primary residence. Attached to the application were falsified Internal Revenue Service W-2 forms and a lease agreement.
As a result of these alleged false statements, a mortgage company funded a $475,000 loan to the straw buyer for the purchase of the property. Neither Stafford nor Ward ever repurchased the property from the straw buyer. Public records indicate that one year after the sale, in August 2006, the property was foreclosed upon and resold for approximately $400,000.
In April 2006, Stafford and Ward sold Ward's house in Vallejo to straw buyer "C.S." A mortgage company funded a $1 million loan to the straw buyer for the purchase of the property based upon information contained in a fraudulent loan application prepared by Stafford and Ward and signed by the straw buyer.
This application contained materially false information concerning the straw buyer's income, employment and the purpose of the purchased location as a primary residence. Among the false representations on the application was the fact that the straw buyer had a monthly salary of $6,000 and earned $13,000 in rental income.
On April 17, 2006, a title company wired $97,279 to Ward. This money represented Ward's equity in the property and her profit from the sale. Ward directed that this money be deposited into accounts controlled by Stafford and Ward and that it be disbursed to pay Ward's creditors.
Neither Stafford nor Ward repurchased the property from the straw buyer. Public records indicate that eight months after the sale to the straw buyer, the property was sold in a foreclosure sale for approximately $800,000.
The defendants are scheduled to be sentenced by Judge England on Aug. 26.
