By Daniel Silliman
In 18 months, with 88 houses, three people stole about $7 million, using "straw buyers," fake rehab jobs and falsified documents to drive up property values and bring in mortgage loans.
According to United States Attorney David Nahmias, the large-scale, mortgage-fraud scheme hurt a handful of lending companies and devastated some neighborhoods in Atlanta's West End, unduly inflating area prices until foreclosures brought them back down.
The three confessed mortgage-fraud schemers were sentenced in federal court on Tuesday:
· Kevin G. Wiggins, 41, an Ellenwood businessman, was sentenced to eight years and four months in federal prison and ordered to pay $4.2 million in restitution.
· Lydia Wiggins Christopher, 59, Wiggins' sister and office manager, was sentenced to eight months, and ordered to pay back $940,000.
· Frank W. Astwood, 37, a real estate appraiser from Hampton, was sentenced to three years in federal prison and also ordered to pay $4.2 million.
There is no parole in the federal system, and the three will be required to serve their whole sentences. They all pleaded guilty to the charges, which were handed down by a grand jury in early 2007.
According to the grand jury indictment, the three "willfully, knowingly and unlawfully" "conspired" and "confederated" "to defraud insured depository financial institutions."
Prosecutors said Wiggins organized the large-scale scam, Christopher managed it and made up paperwork and Astwood helped it along.
Wiggins and Christopher recruited friends and family members to act as "straw borrowers," purchasing rundown houses in Fulton County, and then had Astwood appraise them as if they'd been completely rehabilitated, inflating the value.
Wiggins and Christopher put together fake leases and renting records, to make it look like the houses had been rented at rates above normal for the neighborhood. They had the purchase and sale agreements show prices substantially higher than the real prices paid.
They then sought refinancing, with "fraudulently inflated valuations, two to three times the prices," according to the indictment. The 88 West End houses started out at values of $24,000 to $80,000, according to the U.S. Attorney's office, and were manipulated and falsified up to values of as much as $188,000. The homes were refinanced by four banks -- Colonial Bank, JP Morgan Chase Bank, Wachovia Bank and Washington Mutual Bank. Between the four financial institutions, Wiggins and Christopher secured more than $150 million in financing, using the "straw borrowers."
The maneuvers may have increased area property taxes by as much as 100 percent, according to the U.S. Attorney's office.
Wiggins' large-scale scheme fell apart when the "30310 Mortgage Fraud Task Force" -- suspicious neighborhood activists -- got the attention of the Federal Bureau of Investigation. The FBI found the suspicious activity was connected to a set of corporations which were all owned by Wiggins: TWF, Inc., which allegedly stands for "The Wiggins Family"; TWF Development Group, Inc.; Nfinity Enterprises Worldwide, LLC; Beulah Capital, LLC.
"These criminals will now go to prison," said U.S. Attorney David Nahmias, "and we will continue our work to bring to justice others responsible for mortgage fraud."