Wells Fargo Bank and other lenders suffered losses of approximately $5.3 million
An attorney based in Lake Jackson, Texas, has pleaded guilty to a charge that he participated in a mortgage fraud scheme that resulted in a loss of about $5.3 million to lenders including Wells Fargo Bank, the Attorney’s Office for the Southern District of Texas announced.
Kirk Brannan admitted that from 2005 to 2009 he conspired with others to induce mortgage lenders to lend inflated amounts for purchases of fraudulently appraised homes. Under the scheme, Brannan sold 10 beach homes to straw buyers at exorbitant prices. Straw buyers recruited by co-conspirators misrepresented their address, employer, income, and expenses to lenders. Their loan applications also suggested they were much better credit risks than they actually were.
Brannan also created settlement statements which included exorbitant prices for the sale of three of his properties. These were used by appraisers as comparable sales in appraising Brannan’s remaining properties. The beach properties were sold at two to three times the appraised values, with the lenders deceived into approving the loans.
All of the straw buyers defaulted on the mortgages, and all 10 of the beach properties ended up in foreclosure. Brannan admitted he paid $2.4 million in kickbacks to his co-conspirators as part of the scheme.
Brannan faces up to 30 years in federal prison and a possible $1 million maximum fine. Co-conspirators Chucoboie Lanier, David Morris, and Derwin Blackshear previously pleaded guilty for their roles in the scheme.
