Maravilla Homes Builder In Financial Trouble?
My friend was listening to 590 KLBJ Monday. Rob Balon was filling in for Jeff, the usual host. Rob mentioned that the builder for the Maravilla luxury homes seems to be having issues. Purchasers are dealing with unpaid vendors liens, unfinished homes, and drainage issues.
The builder is a sponsor at KLBJ and ran regular radio ads at least three times each day, which amounted to a great deal of money. Lately, the ads were no longer running. KVUE news station verified this story at the beginning of the month. Apparently, the Maravilla Homes builder is promising to fix issues, but all signs may be pointing to financial trouble.
BUYER RIGHTS
What you can do if your builder commits fraud or goes out of business? Best case is if the builder still guarantees their work even if they shut their doors. Worst case is they just file bankruptcy; sometimes even starting over under a new name. In this case, the buyers will most likely lose their deposits and/or homes. Most builders do not prefer it, but some may agree to complete the unfinished houses.
CHOOSING A BUILDER
Although these purchasers probably did their due diligence, there are good ways to choose a good builder.
- Check with local builder associations like your local chapter of the National Association of Home Builders. Make sure your builder is a member in good standing.
- Ask for 3-4 references from recent clients and check them out. One of my clients even asked to walk through the reference’s home.
- Look for signs of good versus bad construction.
- Don’t be pressured to act quickly or make a decision with someone on your side.
- Remember that the marketing person or agent that is onsite represents the builder. Many builders will pay for a real estate agent to represent you. They’ve usually pre-factored this into their costs.
In any case, the community will be severely impacted by this event.
Effects can include a drop in home values, foreclosures, and unfinished
homes sitting on lots indefinitely.
Tell us: How would you react if your custom home builder went out of business?
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December 31st, 1969 at 5:59 pm
News Release
——————————————————————————–
FOR IMMEDIATE RELEASE CONTACT: Patrick Fortner or Bill Childs
Commission Levies Most Stringent Penalty Against Austin-Area Builder
13 Other Builders Across State Also Penalized
At its February 13, 2008, meeting, the Texas Residential Construction Commission revoked the registration of Austin-area builder Primera Homes Ltd. According to an agreement with the commission, the company’s owner, Michael Kelly, is prohibited from working in the residential construction industry in Texas for 20 years.
The commission took action against Primera Homes for committing multiple violations, including misappropriating trust funds in numerous instances and using false advertisements. Primera Homes was responsible for several Austin-area subdivisions, most notably the troubled Maravilla community.
The commission took administrative action against a total of 14 builders. Five builders were in the Central Texas area, six in the Dallas area and three in the Rio Grande Valley (view complete list).
Commission Executive Director Duane Waddill said the commission’s action is consistent with its commitment to enforcement.
Waddill said, “All these companies failed in some way to fulfill their obligations under the law. As a result, the commission took administrative action. Primera Homes failed most egregiously. It should come as no surprise that Primera Homes and its owner paid the most substantial price — Mr. Kelly and Primera Homes are effectively barred from working in the Texas homebuilding industry for two decades.
“The commission strives to help ensure quality construction for Texans. Sometimes — and these situations are rare — the best way for the commission to achieve its mission is to make sure that a builder legally is not able to work in the industry in Texas for an extended time. This was the case with the owner of Primera Homes,” Waddill said.
“The commission publicly discloses information about builder or remodeler failings. A builder or remodeler that the commission fines or otherwise sanctions does not put themselves in the most flattering public light. The commission encourages Texas consumers to thoroughly research builders and remodelers before they sign a contract for any work,” Waddill said.
Texas consumers can research whether or not a builder or remodeler is registered and if the state has found a defect the builder is not willing to repair as a result of a consumer complaint by using the public record search at http://www.texasrcc.org. For other information about a builder, remodeler, the commission or its operations, Texans can call the agency toll-free help line at 877-651-TRCC (8722).
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March 9th, 2007 at 6:49 pm
Linked. Thanks.
http://maravillahomes.blogspot.com/
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July 9th, 2007 at 1:32 am
has anyone followed up on this? this guy stuck everyone with his bills; embezzled about 1/2 million; and is now declaring bankruptcy. he built w/o permits; and had his lawyer lie to homeowners.
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July 9th, 2007 at 7:28 am
They tried to sell the development to one of my investors. After I looked at the numbers, I felt they were hiding tons of information. For instance, the numbers did not include costs for maintenance, real estate agent fees, utilities, etc.
It’s too bad for homeowners. I wonder if one of the news stations can follow up.
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July 9th, 2007 at 3:39 pm
We live in Apache Shores and drive through “Bella Castillo” formerly Maravilla, and there has been very little activity, several homes are sitting in various stages of development. I would love to know what Buell Custom Homes plans to do to fix this. Its a beautiful community and I would hate to see it stagnate and decline.
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September 27th, 2007 at 10:18 am
I was an investor in the Maravilla Hills development with the original builder Mike Kelly (and his wife Allison Kelly). Their project turned out to be a real estate ponzi scheme. Mike Kelly sold approximately 50 people homes under a JV program, in which our credit was used to build the homes and we were supposed to receive 5-10% of the homes sales price when the home was built & sold.
Mike Kelly and his corporate shell Primera Homes recently filed for bankruptcy protection - but not before allegedly transferring a multi-million piece of property into a trust for him and his father as well as paying himself and family members hundreds of thousands of dollars. The problem is, Kelly left the subdivision with millions of dollars of unpaid vendors and homeowners with unfinished homes and contractor liens that blanketed the subdivision.
Immediately prior to Mike Kelly’s abandoning the project, Steve Buell and his wife Kara Buell entered the picture as the white knight who was going to rescue the subdivision. All the investors had to do was to pay $25,000 per property and he would collectively finish our homes and get them sold so we could move on with our lives. Keep in mind that most of the investors are not wealthy people, but we collectively raised $1.2 million for Buell to finish the project. Many people had to obtain loans from their retirement accounts or deplete life savings to help raise the money.
Within 3 months of giving Buell the $1.2 million, he claimed that the project was out of money and that investors would need to pay significantly more. For most of the homes, Buell did not do any work and the homeowners are in the same predicament they were in 3 months ago - - except $25,000 to $150,000 poorer. The troubling thing is that while Steve Buell claims the project quickly ran out of money - some of the first things he did as the new project manager was to pay an associate a large payment through their investment LLC, pay himself a $60,000 bonus, and pay himself a $20,000 a month salary. It is no wonder the project ran out of money - or more appropriately, was raided.
Unfortunately, his wife Kara Buell (a licensed realtor) who was supposedly in charge of marketing the subdivision and leading the sales office, did little to assist homeowners sell their homes. There were numerous homes that were finished or within 30 days of being finished and not one was sold. In fact, one homeowner learned that their nearly finished home that was supposed to be actively marketed for sale, was instead being used by the Buell’s as a project storage shed.
There is very little good news to report from this entire debacle - except that some of the homeowners have now made it a personal mission to pursue all legal action available (both civil & criminal) against those who have defrauded us.
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October 2nd, 2007 at 12:32 pm
I really hope there’s a good outcome to this, but unfortunately think it will take a long time to reconcile this situation. The news stations don’t seem interested in following the topic, which is too bad. We need some pressure on these folks to help home owners.
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November 7th, 2007 at 10:48 pm
the TRCC showed up today at Kelly’s personal bankruptcy creditor meeting and served Kelly with some sort of papers indicating that his builder license is being revoked. guess he can just do Maravilla Part 2 at Thanksgiving Mountain by hiring another builder….
I heard that the statesman won’t run any stories on this because Kelly listed their paper as a creditor.
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November 11th, 2007 at 10:31 pm
We did a custom home on our own lot with Maravilla and have encountered serious maintence issues while still under our reported 2 year warranty. We have been paying thousands of dollars in warranty repairs because no one has been out since the house was built. We contacted Buell Custom Homes, but they state that they are not responsible. We also noticed that the Maravilla website is up again. Can they still advertise and operate under Maravilla while refusing to honor warranties? Don’t know what to do. Any suggestions would be greatly appreciated.
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November 12th, 2007 at 2:22 am
I have to be careful in what I say because I bet their lawyers are trolling for slander and libel claims.
That said, you’d think a builder would not want to operate if there are liens against other houses they built and they can’t pay their own bills. I won’t mention any names, but certain builders in a high-end subdivision (let’s call them Micky’s Villa) were trying to sell their debt to one of my investors.
After looking at the numbers for Micky’s Villa, I noticed that they were leaving out many costs and the balance sheet looked false. My investors never stepped in on the development because I had too many questions go unanswered. That particular builder is unethical and consumers need someone on their side.
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November 14th, 2007 at 2:18 pm
Great blog. Thank you for very much for helping to get the news out about this horrible fraud.
Just wanted to pass along that Austin TV station KVUE News is airing a follow-up 2-part series Defender’s Investigative Report regarding Primera Homes, Michael Kelly and the Maravilla subdivision.
The 2-part report will air this Wednesday & Thursday night at 10:00pm Central Time - November 14 & 15, 2007.
KVUE television station is Austin, TX local channel 24 and Time Warner cable channel 3.
The previous segment is located on their website:
http://www.kvue.com
Note: I have no affiliation with this TV station, other than promoting the story, as no other media outlet in Austin seems to want to air the story. Thanks!
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November 16th, 2007 at 7:38 pm
I’m glad KVUE doing a follow-up series on this finally. It seems like we’re the only ones who care about what’s happening out there.
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November 18th, 2007 at 8:58 am
a JV confronted Mike Kelly at bankruptcy court on Friday with a document from Primera’s accounting firm. It was written by VCFO to Kelly in early/mid 2006. The document basically informed Kelly that Primera was insolvent, and that he had a legal duty to seek immediate bankruptcy. the letter also told him that Primera shouldn’t be paying the HUGE interest rates to individuals loaning Primera money (mainly Kelly and his dad).
Kelly KNEW his company was out of money LAST YEAR, and he ran out and signed up 20-25 more people for his real estate ponzi scheme…more soft cost money to feed the machine..
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November 18th, 2007 at 9:04 am
oh-the real story here is about the banks and appraisers who facilitated this $20M fraud.
The BANKS tumbled over themselves to give Kelly, a builder with NO track record, enough loans to do a whole neighborhood, using OTHER PEOPLE’S credit. called it the J.V. program.
the banks gave HUGE soft cost draws so that they could make extra interest.
now–the house of cards has fallen, and the banks say they didn’t have any idea about the JV program, and that their negligent lending/inspection doens’t matter. The banks want to put this squarely on the homeowners/JVs.
the appraisers all used bogus houses for ‘comps’ or they used houses that were 10-15 miles away…
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November 18th, 2007 at 12:47 pm
I am glad Christine Haas did the follow up piece to this story… there were a few holes however… Mike Kelly did not sell his three subdivions, he walked away from them. Steve Buell came in to assist SOME of the investors in trying to complete their homes. Mr. Buell did NOT buy or take over Maravilla/Primera Homes or it’s debt, but rather an attempt to help finish the homes. I have noticed that many homes in Maravilla Hills are being completed by San Gabriel Builders and Dan Brouilette and there is even a sales office open now.
It is a travesty that these homeowners/investors have been put in this situation, but be rest assured that Mike Kelly and associates are going to have to answer to many entities.
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January 18th, 2008 at 3:07 pm
Sixteen people have been indicted in a mortgage fraud scheme. One of the sixteen was the mortgage broker who setup many of final loans for Mike Kelly’s Maravilla JV investory program. It’s nice to see some justice served — maybe he will finally be investigated for the fraud he committed on the Maravilla loans he setup.
Maravilla JV
Article:
Friday, January 18, 2008
Sixteen Indicted In Texas Mortgage Fraud Scheme
A federal grand jury returned an indictment charging sixteen individuals with conspiracy to commit fraud and conspiracy to commit money laundering for their roles in a multi-million dollar mortgage fraud scheme. Those charged include:
Cornelius Robinson, 47, Austin, Texas, leader and organizer of the conspiracy;
Silvia Seelig, 45, Austin, during the conspiracy was a licensed real estate agent and an alleged straw buyer;
George H. Watson, 55, Austin, a licensed attorney specializing in real estate transactions. Watson served as the closing attorney on numerous real estate transactions associated described in the Indictment;
James Douglas Atwood, 51, Austin, Cornelius Robinson‘s uncle and an alleged straw buyer;
Michael Breon, 39, Austin, an associate of Cornelius Robinson and an alleged straw buyer. Breon, a licensed loan officer and mortgage broker, was employed by several different loan origination and mortgage companies during the conspiracy;
Sindu Sukumaran, 36, wife of Michael Breon and an alleged straw buyer;
Doris Ann Hill, 40, Austin, a personal banker employed at Wells Fargo Bank. For a fee, Hill allegedly agreed to provide a false verification of deposit to loan underwriters in relation to real estate transactions.
Julius Meyers Lofton, 45, Austin, licensed real estate agent and an alleged straw buyer;
Roy Rivers, age 52 of Austin, friend of Cornelius Robinson and James Atwood and an alleged straw buyer;
Danielle Guice Rosas, 40, Austin, an alleged straw buyer;
Stanley Ma, 27, Honolulu, Hawaii area and an alleged straw buyer;
Leonard Brown, 38, Houston, Texas, and an alleged straw buyer who also allegedly provided a false verification of employment in association with Onyx Consulting and defendant Ma;
Russell Snead, 43, Seattle, Washington area, an associate of Cornelius Robinson and an alleged straw buyer;
Marlon Nathan Torres, 45, Hutto, Texas, an associate of Cornelius Robinson;
Jeffrey Andre Wilkins, 46, Austin, a friend of Cornelius Robinson and an alleged straw buyer; and,
Leroy Williams, 46, Austin, an alleged straw buyer.
The Indictment alleges that from September 1999 to present, the defendants participated in a scheme to defraud mortgage lenders, including federally insured financial institutions, with regard to loans acquired to purchase 25 properties in the Austin and San Antonio, Texas area. The scheme centered upon the use of real estate flips. That is, the defendants purchased property at one price and would immediately sell, or flip, the property to a straw buyer at a higher price. In doing so, the mortgage lenders were deceived as to the true nature of the transaction and the financial status of the straw buyer. The straw buyers did not make the subsequent monthly mortgage payments and all of the loans have gone into default. All of loans have been either foreclosed upon or are the subject of current foreclosure proceedings.
Each defendant faces up to 30 years in federal prison upon conviction of the fraud conspiracy charge; up to 20 years in federal prison upon conviction of the money laundering conspiracy charge. In addition to the conspiracy charges, the indictment contains several substantive charges including wife fraud, false statements and receipt of commission or gift for procuring loans.
It is important to note that an indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.
The properties involved include:
10920 Preston Trails, Austin;
3306 Pennsylvania, Austin;
4708 Heflin Lane, Austin;
5403 Pendleton, Austin;
3109 Val Drive, Austin;
1174 Graham, Austin;
5200 Meadow Field; San Antonio;
5205 Meadow Field; San Antonio;
5216 Meadow Field; San Antonio;
5221 Meadow Field; San Antonio;
5228 Meadow Field; San Antonio;
301 Lightsey, Austin;
5100 Woodmoor, Austin;
1207 Harvey, Austin;
3700 Govalle, Austin;
5011 Nixon, Austin;
3303 Hickory Creek Cove, Austin;
7412 Albert Lane, Austin;
3900 Pawnee Pass, Austin;
2507 Givens Avenue, Austin;
2904 Cherrywood, Austin;
10415 James Ryan Way, Austin;
3513 Josh Lane, Austin;
1709 Enfield, Austin;
601 Explorer, Lakeway;
12605 Lyndon, Austin;
27013 Masters Parkway, Spicewood;
4412 City Park Road, Austin;
1345 Upper ELgin River Road, Elgin, all of Texas.
This case was investigated by the Federal Bureau of Investigation. It is being prosecuted for the government by Assistant United States Attorney Mark Lane.
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January 21st, 2008 at 9:15 am
It’s amazing how bad this is as I hear more about it. It seemed like a blatant scam. I really hope the justice system shows Mike Kelly and others that they can’t just go out and take advantage of good, hardworking people without paying for it.
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January 23rd, 2008 at 7:07 pm
YOU accuse me of doing fraud on Maravilla loans?
Who are you? If you have something to say, don’t cower and hide.
You couldn’t be further from the truth with your ignorance.
Let’s talk real facts. All of the loan files were examined by the
State of Texas, and there was no fraud.
The FBI is capitalizing on my name showing up with two different entities that hurt home owners at the same convenient time. Over 11 years in mortgage and I met 2 bad connections. They both are being investigated at this same time. I will not be tied to either one. But this has caused me to be in the spotlight. Many people believe this is the cause.
This indictment has nothing to do with me doing loan fraud. I provided financing for a realtor who referred me business. Those files too have been investigated by the FBI, and I am not being charged for loan fraud. Just like any realtor that has sent me business over the years, I would facilitate their prospects financing. I will not go into detail on this blog, but we are confident these people will recieve their justice and we will not be tied to them.
I had nothing to do with any Maravilla JV agreement. If someone had an agreement with Maravilla Homes, that agreement did not include ME or Executive Mortgage Center. Those agreements were around ALONG time before our managment offered me the Maravilla account. Remember, I only closed about 20% of his business.
I will not sit quietly and take blame for any damages done by hurt investors.
If your posting something about me anywhere, I will comment. I will not stand for this.
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January 24th, 2008 at 10:49 pm
I’m sorry but I have little faith in those who defrauded me and other Maravilla homeowners and now proclaim their innocence. I have closely followed this fraud, as it has devistated my life.
Guess it is just a strange coincidence that some of the indicted parties referenced above have been involved in more than one fraud. Note that the above FBI indictment is for a fraud that began years ago - before the Maravilla ponzi scheme began.
I understand that at least one of the mortgage brokers referenced above and involved in the Maravilla fraud surrendered his license. Why would one voluntarily surrender the means by which they earn a living? How many civil lawsuits are currently filed? I also find it interesting that the President of Maravilla Homes, while under oath in his bankruptcy hearings, stated that he paid a certain indicted mortgage broker thousands of dollars for the loans the broker generated for the defrauded Maravilla investors. Last time I checked, under the table kickbacks to a mortgage broker that do not appear on a buyer’s HUD-1 statement is a RESPA violation and mortgage fraud.
I hope all those parties who defrauded the Maravilla homeowners and took part in one of Austin’s largest residential real estate frauds in recent history rot in jail. Their greed and egos led to many people’s lives being ruined. Shame on you!
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January 27th, 2008 at 2:25 am
More speculation. Not facts. More false assumption.
You see, when the company you work for changes from a broker shop to a ‘bank’, all mortgage brokers have to surrender their licenses to the bank. You can ask any mortgage broker that now works for a bank. EMC changed to Supreme Lending Bank and I had to surrender my license. It is proceedure. You still originate loans. But nice try, it had nothing to do with any of this.
And your statement about kickbacks is FALSE as well. Again your speculating with out facts.
I know the RESPA. Sorry.
THE BOTTOM LINE: It didn’t matter that I did the loan for you. You would have obtained that loan from any construction loan officer you were referred to. I have spoken to a few other Maravilla purchasers that used OTHER loan officers, and they hate those loan officers too, and blame those loan officers! I understand yelling when your hurt, but this time, the loan officers are not to blame.
Loan officers do not build your homes, and did not fail you.
I could have been ANY loan officer, and you would have STILL purchased a Maravilla home, AND YOU KNOW IT.
At least some people appreciate the fact that I tried to help, and didn’t just leave my borrowers hanging once construction stopped.
I am sure your attorneys are very convincing, that everyone is to blame.
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January 28th, 2008 at 4:55 pm
Currently federal prosecutors tout above a 95% conviction rate. Nice Try Mike! Do the right thing and come clean.
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January 30th, 2008 at 10:52 am
Currently federal prosecutors tout above a 95% conviction rate. This is primarily due to the fact that most cases never make it to trial. Most defendants end up taking a plea bargain rather then risk a potentially much greater prison sentence which could be dealt them if they actual went to trial and lost. Another factor is the empowerment and impunity given to both investigating authorities and prosecutors, along with an interesting trial maneuver called “Jury Instructions”. Jury instructions are basically parameters that the judge provides the jury which can greatly affect the outcome of a verdict.
Lets say you where being charged with a federal crime which could send you to prison for 10 years if you lost at trial, and you are being offered a 3 year prison sentence if you accept a plea bargain. If you believed you we’re innocent, would you still take your case to trial knowing that if by chance you lose, you may have to serve a 10 year prison sentence? Currently within the Federal prison system, you will server at least 85% of that time. That is why the percentage is so high.
What about the innocent person who’s indicted - won’t a trial bring out the truth?
Ideally that’s how it should be but unfortunately, at least in the federal court system, it many times does not go this way. It’s almost always the goal of the prosecutor to get the defendant to take a plea bargain. Why? Because it saves the prosecutor, time and the government, money.
The prosecutorial system is actually engineered to motivate a criminal defendant into taking a plea bargain by offering points off for cooperating. It is well known that a criminal defendant, who chooses to take the case to trial, risks receiving a much stiffer prison sentence as opposed to taking a plea bargain.
What people don’t realize is that Federal prosecutors can get an indictment at the drop of a hat. Usually its a closed hearing and most of the time the person or persons targeted have no idea this is happening. The next thing you know your fighting for your life.
It is not to rule out the possibility home owners that signed a JV agreement with Maravilla may have some risk here!
The bigger the case, the faster career advancement.
Actual trial conviction percentages are much less then 95%, but very costly.
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January 30th, 2008 at 11:31 am
Psalms 71:13-15
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February 21st, 2008 at 6:50 pm
Why does it always take so many complaints, sometimes such serious ones, before anything is done? The TRCC has been more of a builder protection agency, just like bogus licensing agencies that are nothing but good old boy clubs. The state rarely sees what bad builders do to consumers as “fraud” until other businesses or banks get hurt, then they step in. By then many homeowners may have lost a great deal, that they’ll never get back. If action was taken sooner, and these crooks did jail time, it might prevent some of these incidents. Consumers can’t even make informed decisions because so many times complaints are kept under wraps until quite a few people are harmed. Still others’ complaints are hidden in arbitration, a common clause in builder contracts that keeps consumers from being able to sue which is at least public record. This guy should’ve been shut down a long time ago, and like I read of jailed crook/developer Tony Rezko in IL, should be “sharing underwear” with cell mates now.
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February 25th, 2008 at 1:38 pm
It takes a while and the diligence of at least 1-2 of the home owners to stand up to these types of crooks. They got the news on their side after a reporter saw value. Otherwise, I’m not sure TRCC would have been as swift.
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April 1st, 2008 at 9:04 pm
JURY CONVICTS FIVE IN AUSTIN AREA MORTGAGE FRAUD SCHEME
United States Attorney Johnny Sutton announced that a jury returned guilty verdicts late Friday afternoon in United States District Court in Austin, Texas against five current and former Austin residents, including ringleader Cornelius Robinson, for their roles in a multi-million dollar mortgage fraud scheme.
Following a nine day trial, the jury convicted:
• Cornelius Robinson, age 47, of Austin, Texas, who was the leader and organizer of the fraud scheme. Robinson was convicted of conspiracy to make false statements related to a loan, conspiracy to commit wire fraud, five substantive counts of wire fraud, 9 substantive counts of false statements related to a loan, one count of aiding and abetting the receipt of commissions or gifts from loans by a bank employee, conspiracy to commit money laundering and 7 substantive counts of money laundering. Robinson was acquitted of one false statement charge;
• Michael Breon, age 39, formerly of Austin and a current resident of McKinney, Texas, and a straw purchaser. Breon was convicted of conspiracy to make false statements related to a loan, one count of wire fraud and one count of conspiracy to commit money laundering. Breon, a licensed loan officer and mortgage broker, was employed by several different loan origination and mortgage companies during the conspiracy. Breon was acquitted of conspiracy to commit wire fraud;
• Sindu Sukumaran, age 36, wife of Michael Breon and a straw purchaser. Sukumaran was convicted of wire fraud. Sukumaran was acquitted of conspiracy to make false statements related to a loan, conspiracy to commit wire fraud and conspiracy to commit money laundering;
• Marlon Nathan Torres, age 45, of Hutto, Texas, a licensed real estate agent and buyer and seller of real estate in the Austin area. Torres was convicted of one count each of conspiracy to commit money laundering and money laundering. Torres was acquitted of conspiracy to make false statements related to a loan, conspiracy to commit wire fraud and one substantive count of false statement related to a loan;
• Jeffrey Andre Wilkins, age 46, of Austin, a cousin of Cornelius Robinson and a straw purchaser. Wilkins was convicted of one count each of conspiracy to make false statements related to a loan, conspiracy to commit wire fraud, false statement related to a loan, conspiracy to commit money laundering and money laundering.
United States District Judge Sam Sparks has scheduled sentencing for June 20, 2008.
The five defendants which went to trial were the last of sixteen defendants who were indicted on January 8, 2008 by the Federal Grand Jury in Austin. Eleven co-defendants pleaded guilty to related charges prior to trial. These co-defendants are set for sentencing on June 6, 2008. The co-defendants include:
• Silvia Seelig, age 45, of Austin, and wife of Cornelius Robinson who during the conspiracy, was a licensed real estate agent and a straw buyer;
• George H. Watson, age 55, of Austin, a licensed attorney who specializes in real estate transactions. Watson served as the closing attorney on most of the real estate transactions described in the Indictment;
• James Douglas Atwood, age 51, of Austin, Cornelius Robinson’s uncle and a straw buyer;
• Doris Ann Hill, age 40, of Austin, a personal banker employed at Wells Fargo Bank. For a fee, Hill agreed to provide a false verification of deposit to loan underwriters in relation to three real estate transactions involving defendant Snead;
• Julius Meyers Lofton, a 45-year-old licensed real estate agent living in Austin and a straw buyer;
• Roy Rivers, age 52, of Austin, and a straw buyer;
• Danielle Guice Rosas, age 40, of Austin, and a straw buyer;
• Stanley Ma, age 27, of Honolulu, Hawaii and a straw buyer;
• Leonard Brown, age 38, of Houston, Texas, who provided a false verification of employment in association with Onyx Consulting and defendant Ma;
• Russell Snead, age 43, of the Seattle, Washington area and a straw buyer; and,
• Leroy Williams, age 46, of Austin and a straw buyer.
From September 1999 to present, the defendants participated in a scheme to defraud mortgage lenders, including federally insured financial institutions, with regard to loans acquired to purchase 25 properties in the Austin and San Antonio area. The scheme centered upon the use of real estate “flips.” That is, the defendants purchased property at one price and would immediately sell, or “flip,” the property to a “straw buyer” at a higher price. In doing so, the mortgage lenders were deceived as to the true nature of the transaction and the financial status of the “straw buyer.” The straw buyers did not make the subsequent monthly mortgage payments and all of the loans have gone into default. All of loans have been either foreclosed upon or are the subject of current foreclosure proceedings.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service - Criminal Investigations. The case is being prosecuted for the government by Assistant United States Attorney Mark Lane.
[Reply]
Not a Mike Kelly Fan reply on June 20, 2008 8:40 pm:
The verdict is in…
Mike Breon got 4 years in prison plus 5 years supervised after his release, his wife got three years.
I wonder when Mike Kelly will get his due.
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