7 Charged in $10-Million Mortgage Fraud Scheme

Seven people have been charged with bilking lenders out of more than $10 million in a mortgage fraud scheme that included use of a bogus credit union, the U.S. attorney’s office said Thursday.

The defendants, named in an 18-count indictment, bought numerous properties between 1997 and this year, fabricating buyers’ names, Social Security numbers and employment and bank information, prosecutors said.

They said the scam worked this way:

For example, someone would be sent to buy a house for $200,000. The sham purchaser would then apply for a $400,000 loan, claiming the house was being sold for $500,000.

That’s where the phony credit union came in. The buyer would tell the lender he was going to make a $100,000 down payment, drawing on his credit union savings.

Assistant U.S. Atty. Elena Duarte said the defendants turned out phony financial documents from a nonexistent credit union they called HFCC.

When the loan came through, she said, the defendant would pay the buyer his $200,000 and pocket the remaining $200,000.

Charged were Donald Ray Carroll, Roxie Nadine Carroll and Shirley Ann Jackson, all of Riverside; Patsy Ann Duncan and Barbara Jean Sabol of San Bernardino; Calethia Bridgett McNair of Cerritos; and Thomas Edward Williams of Corona. McNair is a fugitive.

The indictment alleges conspiracy, along with mail, wire, bank and identity fraud.