FEDERAL

y falsified, forged, and altered documents. Many of
the fraudulently originated loans were sold to Fannie
Mae, which lost approximately $1.3 million from
defaults associated with the loans.
This was a joint investigation with HUD-OIG and
FDIC-OIG.
A $20 Million Mortgage Fraud Scheme, San
Diego, California
On April 25, 2013, Mary Armstrong pled guilty to
wire fraud, money laundering, and conspiracy. As a
result of her plea, Armstrong was sentenced to 100
months of incarceration and 36 months of supervised
release. On May 6, 2013, William Fountain pled
guilty to conspiracy to commit
wire fraud and money laundering.
As a result of his plea, Fountain
was sentenced to 42 months
of incarceration, 36 months of
supervised release, and $532,687
in restitution. On June 17,
2013, John Allen pled guilty to
conspiracy to commit wire fraud
and money laundering. As a result
of his plea, Allen was sentenced to
1 year and 1 day of incarceration and 36 months of
supervised release. All pleas and sentences occurred in
the U.S. District Court for the Southern District of
California.
With the help of her co-conspirators, Armstrong, an
unlicensed mortgage broker, operated a nationwide
loan origination fraud and kickback scheme,
defrauding lenders through the sale of $100 million
of real estate at inflated prices. She siphoned
overpayments to bank accounts she controlled and
collected up to $14.5 million in kickbacks. Purchasers
of her fraudulently originated loans, including the
enterprises, suffered losses of up to $20 million.
This was a joint investigation with the FBI.
Mortgage broker
sentenced to
100 months
incarceration.
Suspended Real Estate Agent and Six
Conspirators Indicted, Kansas City, Kansas
On April 23, 2013, in the U.S. District Court for
the District of Kansas, Manjur Alam was indicted
for conspiracy, wire fraud, bank fraud, and money
laundering; Janice Young, Bruce Dykes, Christopher
Ginyard, Henry Pearson Sr., and Steven Pelz
were indicted for conspiracy and wire fraud; and
Henry Pearson Jr. was indicted for conspiracy. On
September 3, 2013, Pearson Sr., Ginyard, and Young
pled guilty to wire fraud, and Pearson Jr. pled guilty
to bank fraud. Dykes pled guilty to wire fraud on
September 5, 2013.
From 2006 to the present, Alam and his conspirators
allegedly schemed to sell properties
using bogus sellers, buyers, and
documentation. Several loans
involved in their scheme were
purchased by the enterprises.
This was a joint investigation with
IRS-CI and HUD-OIG.
Recruiter, Escrow Officer,
Builders, and Loan Officers
Charged, Dallas, Texas
On April 11, 2013, in the U.S. District Court for the
Eastern District of Texas, Lawrence Day was indicted
for conspiracy to commit wire and mail fraud, wire
fraud, aggravated identity theft, and aiding and
abetting; Donna Cobb, Bryan Scott, and Donald
Mattox were indicted for conspiracy to commit wire
and mail fraud; and Michael Edwards and Scott
Sherman were indicted for wire fraud and conspiracy
to commit wire and mail fraud.
From September 2005 through July 2008, the
defendants allegedly conspired to defraud lending
institutions by using material misrepresentations
Semiannual Report to the Congress • April 1, 2013–September 30, 2013 27