A team of federal agents arrested seven local residents Thursday in what one Maryland official called the worst mortgage fraud scam in the state’s history.
Prosecutors claim that eight people, one of whom is still at large, bilked at least 100 homeowners out of about $10 million after promising to prevent foreclosure on their homes.
Five of the defendants were arraigned at the District Court in Greenbelt, Md., Thursday afternoon, and two others in North Carolina, where they were arrested.
The Maryland and District residents were each charged with one count of conspiracy to commit mail and wire fraud and 15 counts of mail fraud. These counts all carry maximum sentences of 30 years in prison and a $1 million fine. Five of the defendants were also charged with money laundering.
“No case in the history of our offices has had the magnitude of this particular case,” said Thomas E. Perez, secretary of the Maryland Department of Labor, Licensing and Regulation, at a news conference. The investigation, which began in 2006, spanned several state and federal agencies including the Internal Revenue Service, the FBI and the Secret Service.
The alleged scam revolved around Metropolitan Money Store, a company based in Maryland that offered homeowners behind on mortgage payments a “foreclosure reversal program,” where the company would seek third parties to buy an indebted property and restore the homeowner’s credit. The indictment alleges that they actually took out inflated mortgages to pay off the debt, pocketed the remaining equity on the home and let the bank foreclose on the property by not paying off the second mortgage.
Prosecutors say the defendants then used this money to purchase luxury items like fur coats, limousine services and jewelry, and even to pay for a wedding.
Joy Jackson, president of the Metropolitan Money Store and Fort Washington resident, was arrested along with her husband, Kurt Fordham, in North Carolina. Other defendants are also related, including Chief Executive Officer Jennifer McCall, her husband, Clifford, and her daughter Chandra Jones. Katisha Fordham, Kurt Fordham’s sister, and Lanham resident Wilbur Ballesteros were also charged. D.C. resident Ronald Chapman remains at large.
Two federal class-action lawsuits have also been filed by alleged victims of the scheme against the defendants. One of the suits, which has more than 50 anonymous plaintiffs, states that homeowners were duped in Virginia, Maryland and the District.
