THREE MORE SENTENCED TO FEDERAL PRISON IN MORTGAGE FRAUD CONSPIRACY

PRESS RELEASE

Susan W. Brooks, United States Attorney for the Southern District of Indiana, announced that three more people involved in the American Savings Mortgage fraud scheme were sentenced to federal U.S. District Judge Barker following their pleas of guilty to conspiracy to commit mortgage fraud and other charges within the last four days.

Yesterday, Judge Barker sentenced PAMELA MARTINEZ, age 37, of Minneapolis, Minnesota, to 40 months’ imprisonment following her pleas of guilty to conspiracy to commit wire fraud and money laundering. Martinez was the co-owner of American Savings Mortgage (ASM) with Kenneth McKinney. Martinez prepared the fraudulent loan application packages for 99 fraudulent loans and sent them to the victim bank. The bank lost more than 3.4 million dollars on the fraudulent loans brokered through ASM. Martinez assisted the government in the prosecution of others involved in the scheme by testifying at the trial of Joseph Britton, Mark Speckman, and Michael Smith, who were convicted by a jury on all counts following a two - week trial before Judge Barker in September 2006.

In sentencing MARTINEZ, Judge Barker stated that the mortgage fraud scheme had a serious and “corrosive effect on many institutions we trust in society” including the banking industry, real estate appraisal industry, and the economy in general. The judge noted the devastating effect that the epidemic of mortgage fraud has had on the community making neighborhoods where the houses that are sold in the schemes “ugly, deteriorating, health risks, and eye-sores.”

On Monday, November 6, 2006, Judge Barker sentenced DARRAL STANLEY, age 42, of Marion, Indiana, to 16 months’ imprisonment, 11 months’ of which were ordered to be served by home detention. STANLEY was a loan officer at ASM who assisted in preparing the fraudulent loan packages. Stanley pleaded guilty to conspiracy to commit wire fraud and also agreed to assist the government in the investigation.

Last Thursday, November 2, 2006, VALERIE MCNAIR, age 45, of Marion, Indiana, was sentenced to 33 months’ imprisonment following her pleas of guilty to conspiracy to commit wire fraud and money laundering. MCNAIR recruited persons to buy properties at inflated prices in exchange for paying them approximately $5000 per property they bought. The payment to the buyers was made through a kickback scheme in which the proceeds from the loans were distributed among the members of the conspiracy. MCNAIR also assisted the government in the investigation.

This case was the result of a four- year investigation by the Internal Revenue Service, Federal Bureau of Investigation, and the Postal Inspection Service working as a team on the United States Attorney’s Mortgage Fraud Task Force. Six more defendants are awaiting sentencing in the case.

According to Assistant United States Attorneys James Warden and Donna Eide, who prosecuted the case for the government, Judge Barker also imposed 2 years’ supervised release for STANLEY and MCNAIR, and 3 years’ supervised release for MARTINEZ following their release from prison. The defendants were also ordered to pay restitution in the following amounts: McNair: $1.4 million; Stanley, $1.4 million, and Martinez, $3.4 million.

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