Reginald Derrick Greene, age 41, of Bowie, Maryland was sentenced today to one year and one day in prison, followed by 3 years of supervised release for conspiracy to commit mail and bank fraud in relation to a mortgage flipping scheme, announced United States Attorney for the District of Maryland Rod J. Rosenstein. U.S. District Judge Peter J. Messitte also ordered that Greene pay restitution of $191,984.
According to the statement of facts presented at his guilty plea on April 12, 2006, from at least July, 1999 to February, 2000, Greene conspired with Waldo Alicea and others to defraud mortgage lenders using “flip” transactions involving fraudulent mortgages for the purchase of single family homes in Charles and Prince George’s counties. Greene, an attorney, was employed as a settlement agent for DHC Title Company, Inc. (“DHC”). Greene was responsible for handling real estate settlements and closing services for properties located in Maryland, and served as an agent for title insurance companies. Greene and his co-conspirators contracted to purchase a foreclosed or bank-owned property at a depressed price. They then entered into a second contract to “flip” or sell the property at a much higher price to a straw purchaser.
The “flip” was typically accomplished through the use of fraudulent appraisals prepared by Alicea, which created the false impression that the property was worth the much higher price. The flip was also often accomplished through the use of fraudulent documents submitted in support of mortgage loan applications. Greene and his co-conspirators approached various individuals to serve as straw purchasers, assuring them that they could purchase properties at little or no personal financial risk. The conspirators supplied lenders with false information about the straw purchasers’ personal financial circumstances, thereby enabling the straw purchaser to qualify for a mortgage loan based on the artificially inflated price. Once a lender agreed to fund the mortgage, the conspirators arranged for settlement and distribution of the loan proceeds to be handled by Greene at DHC. Greene would cause DHC to issue a title commitment, assuring the lender that the seller owned the property as of the date of settlement, when in fact the seller had not yet purchased the property.
Alicea, age 45, of Fredericksburg, pled guilty to the same charge and was sentenced on June 19, 2006 to 15 months in prison followed by 3 years of supervised release. Judge Messitte also ordered that Alicea pay restitution of $191,984.