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Fraud Participant Pleads Guilty in $7 Million Case

Another mortgage fraud engineer has been brought to justice in New York, with Marleen Shillingford entering a guilty plea following her participation in a multimillion-dollar scheme. Appearing before ""U.S. Magistrate Judge"":www.fedjudge.org/ Donna F. Martinez, the defendant waived her right to indictment on charges related to a scam that involved more than 40 properties.


Pleading guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, Shillingford copped to her role in the mortgage fraud ring, which targeted real estate in Bridgeport, Connnecticut. The fraudulent acts were primarily executed against properties held by banks receiving funding from the ""Troubled Asset Relief Program"":http://www.federalreserve.gov/bankinforeg/tarpinfo.htm (TARP).

Shillingford and her co-conspirators falsified loan applications, misrepresenting the credit standing of their buyers to mortgage lenders, many of which were TARP-related financial institutions. The real estate company involved, Waikele Properties Corp., operates out of Connecticut and New York, and for nearly a decade between 2001 and August 2011, Shillingford and others within Waikele obtained fraudulent mortgages for multi-family properties in Bridgeport.

Using existing multi-family homes and vacant land on which the fraudulent group built new houses, the conspirators brought in borrowers to purchase the properties, while acting as the buyers' real estate agent and applying for residential mortgages.


Shillingford and the rest of the ring would then file loan applications which contained lies regarding the buyers' employment, income, assets, liabilities, previous property ownership, and intended use of the property as a primary residence. The fraud conspirators also supplied fake documents for support, as well as falsified letters from nonexistent employers, fictitious earnings statements, and incurred bank records.

Upon loan approval, the ill-gotten proceeds from the loans were wired to Waikele and then transferred to the co-conspirators accounts. Many of the buyers were ""straw"" purchasers who never occupied the residences in question and later defaulted on their loans. Mortgage lenders taken in by the fraudulent scheme are believed to have lost around $7 million.

Christy Romero, who is the ""Acting Special Inspector General for TARP"":www.sigtarp.gov/ (SIGTARP), and David B. Fein, U.S. Attorney for the District of Connecticut, made the announcement jointly following Shillingford's guilty plea. Fein commented on the proceedings, saying, ""Through this decade-long scheme, dozens of Bridgeport properties ended up in foreclosure, blighting neighborhoods and costing lenders millions. I want to commend IRS-CI, the FBI, HUD-OIG and SIGTARP for their excellent work in this ongoing investigation and for exposing this scheme.""

SIGTARP, the ""Internal Revenue Service's Criminal Investigation"":www.irs.gov/ unit, the ""Federal Bureau of Investigation"":www.fbi.gov/, and the ""U.S. Department of Housing and Urban Development's Office of Inspector General"":www.hud.gov/ will continue their examination of the case and related members of the fraud ring. Going forward, the case will be prosecuted by Assistant U.S. Attorneys Douglas P. Morabito and David T. Huang, and it's worth noting that the ""President's Financial Fraud Prevention Enforcement Task Force"":www.justice.gov/usao/eousa/foia_reading_room/usab5805.pdf also collaborated to bring this case to court, as SIGTARP is considered a member of the force.

Shillingford will receive her sentence in the courtroom of ""U.S. District Judge"":http://www.uscourts.gov/FederalCourts/UnderstandingtheFederalCourts/DistrictCourts.aspx Robert N. Chatigny on December 30. She faces a maximum sentence of 40 years, and the government is also requesting the forfeiture of 20 properties in the Bridgeport area.

About Author: Abby Gregory


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