A Burlington, NC man faces
federal charges of mortgage fraud and impeding a federal investigation and is
now considered a fugitive, the U.S. Department of Justice says.
Four managers with Phoenix Housing Group, headquartered in
accusations that they conspired to defraud buyers of manufactured and modular
housing and originated $158 million in fraudulent federally secured loans for
their purchase.
The scheme sold more than 1,100 homes to
consumers in
and elsewhere, resulting in mortgage insurance claims totaling more than $24
million and losses to the
exceeding $16 million, a release from U.S. Attorney Anne Tompkins’s office
said. Tompkins prosecutes federal cases in the Western District of North
Carolina.
Fabian Sparrow, 35, of
was indicted Tuesday on one count of conspiracy to make false statements to the
U.S. Departments of Housing and Urban Development and Agriculture and one count
of aiding and abetting the destruction of documents with intent to impede a
federal investigation.
According to the release, Sparrow was a sales manager at the company’s
business as Southern Showcase Housing at
“An arrest warrant has been issued for Sparrow, who is currently believed
to be a fugitive,” the release said.
A superseding indictment filed Aug. 6 says that Sparrow; Dennis Wayne Parris,
55, of Pinehurst; Andrew B. McKeown, 38, of Asheboro; and Roger Dean Bailey
Jr., of Hickory, were employed by Phoenix Housing Group, a manufactured home
retailer, between April 2005 and October 2010. Parris was a senior vice
president. Sparrow, McKeown and Bailey were sales managers in
A longtime
officer pleaded guilty Tuesday to taking part in a mortgage-fraud ring that
rigged more than $158 million in home loans across the
resulting in millions of losses to federal loan programs.
Joseph “Joey” Klakulak approved more than a third of the
loans, the U.S. Attorney’s Office says. He pleaded guilty to one count of
conspiracy to defraud the
States
federal investigators.
Klakulak, 37, faces up to five years in prison and a
$250,000 fine. He was one of three loan officers accused of participating in
the six-year scheme.
Because the loans were federally insured, even if the buyer
defaulted, the loan company involved got paid. Klakulak and two other loan
officers at the company charged in the case approved mortgage applications even
though they knew they had been rigged, investigators say.
PHG’s sales pitch for houses and land used claims of
nonexistent “rent to buy” programs or down payments as low as $500.
According to the indictment, company personnel, with the
help of Klakulak and the other loan officers, regularly manipulated their
customers’ credit reports so they would qualify.
In some cases, the sales staff persuaded customers to sign
promissory notes, which they then used to force buyers to sign mortgages much
higher than promised. When customers made down payments or put up earnest
money, PHG personnel often pocketed them as profit, prosecutors say.
By MICHAEL D. ABERNETHY Times-News –
McClatchy-Tribune Information Services
