Father and son admit to role in $29m mortgage fraud scheme

by Ryan Smith11 Nov 2013

Three California real estate professionals, including a father and son, have pleaded guilty for their involvement in a $29 million mortgage fraud scheme that ran from 2004 to 2007.

Carlyle “Carl” Lee Cole, 66, pleaded guilty Thursday to conspiracy to commit wire fraud, mail fraud and bank fraud. Caleb Lee Cole, 37, pleaded guilty to mail fraud. Co-defendant Sneha Ramesh Mohammadi, 51, pleaded guilty Nov. 5 to conspiracy to commit mail fraud, wire fraud and bank fraud.

According to U.S. Attorney Benjamin Wagner, the Coles and Mohammadi were part of a massive scam to defraud mortgage companies and financial institutions by using straw buyers to purchase properties at inflated prices. The buyers generally received payments of up to $20,000 per property, while the Coles’ real estate firm, Crisp, Cole & Associates, received profits from the sale of the properties. Mohammadi, who was an office manager at the firm, admitted that she had acted as a straw buyer in addition to her role in the fraud as an employee.

“The defendants falsely inflated real estate prices knowing that the foreclosures that followed would do harm to local builders, consumers, and lenders,” Wagner said. “Crisp & Cole was emblematic of the recklessness and lawlessness in the mortgage industry in the mid-2000s that caused the financial crisis that led to so much devastation in the Central Valley of California.”

“Carl and Caleb Cole’s greed fueled an egregious, large-scale conspiracy that cost the mortgage industry more than $29 million,” said Monica M. Miller, special agent in charge of the Sacramento field office of the FBI. “These individuals fraudulently obtained large sums to support lavish lifestyles. Unfortunately, these crimes are not victimless and the damage to the community is lasting. The conspiracy artificially inflated home values that, in turn, raised purchase prices of comparable homes, forcing innocent homebuyers to pay well above true market value for their homes.”

Several co-defendants in the case have3 pleaded not guilty and are scheduled to go to trial in January. The Coles will be sentenced in February. Mohammadi’s sentencing is scheduled for June.

Carl Cole and Mohammadi face a maximum of 30 years in prison and a $1 million fine. Caleb Cole faces a maximum of 20 years in prison and a $250,000 fine.

COMMENTS

  • by Bill Sommers | 11/11/2013 11:22:00 AM

    Glad that the court system can figure out fraud from 6 years ago . It seems to imply that this same thing can happen today.
    What about the TBTF players ?

  • by June Morrison | 11/12/2013 5:51:43 AM

    It is good to hear about dishonest, unethical, greedy people being caught and punished for their actions. Hopefully, more will be caught and punished. Anyone who profited by flipping houses for enormous profits and then turned around and strategically defaulted or asked for modification help is unethical as well. It's OK to reap the rewards but not be affected by losses?

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