Mortgage Fraud—Conviction in Houston

Cynthia Eneanya—a Missouri City, Texas, loan officer—has been convicted on all 26 counts arising from a multi-million dollar mortgage fraud scheme.^[1] Conducted between September 2002 and August 2004, the scheme “involved the securing of mortgages by the defendants in amounts greater than the amount the seller received in payment for the house. The buyers gave the difference between the sales price and the mortgage amount to the defendant brokers.”^[2] The buyers, who each received $5,000 for each house they purchased during the scheme, then defaulted on their loans.^[3]

A total of 12 houses worth approximately $500,000 each were obtained by making false statements and concealing facts in the sworn mortgage applications. The falsities include: falsely inflating the buyers’ incomes; listing false employers; providing false references; falsely stating that the buyers’ current residences were leased; falsely stating that the buyers intended to live in the house of purchase after the sale was completed; and failing to disclose on their mortgage application the buyers’ obligations to pay for other homes previously purchased in the scheme.^[4] Ms. Eneanya “completed the mortgage applications and submitted them to the mortgage companies for their consideration. She also worked as a mortgage broker and arranged the loans for the buyers in the scheme.”^[5]

Ms. Eneanya is the fifth of six defendants indicted in the scheme; the buyers have already pleaded guilty to conspiracy to commit wire fraud, and a fourth man pleaded guilty to conspiracy to launder money.^[6] The alleged ringleader, Peter Gibson Kolo is a fugitive and there is a warrant outstanding for his arrest.^[7]

Ms. Eneanya was convicted of conspiracy, conspiracy to commit money laundering, and wire fraud.

Conspiracy is covered by 18 U.S.C. § 371, which makes it a crime for a person to conspire with at least one other person to commit an offense against the United States and then do an overt act in furtherance of the conspiracy. The punishment for a violation of section 371 is a fine, imprisonment for up to 5 years, or both.

Conspiracy to commit money launder is covered by 18 U.S.C. § 1956(h) which states that any person who conspires to commit an offense under section 1956 will be punished as though she actually committed the offense. Section 1956(a)(1) states that it is a crime for a person who knows that certain property involved in a financial transaction represents the proceeds of some form of unlawful activity, to conduct or attempt to conduct such a financial transaction with the intent to promote the carrying on of the unlawful activity,^[8] or knowing that the transaction is designed in whole or in part to conceal to disguise the nature, location, source, ownership, or control of the proceeds of the unlawful activity.^[9] The specified unlawful activity in this case is wire fraud.^[10] The punishment for a violation of section 1956(a)(1) is a fine, imprisonment for up to 20 years, or both.

Finally, wire fraud is covered by 18 U.S.C. § 1343, which makes it a crime for a person to devise a scheme or artifice to defraud and then use the nation’s telecommunications technology to carry out that scheme. The punishment for a violation of section 1343 is a fine, imprisonment for up to 20 years or both. If a financial institution is harmed in the carrying out of the scheme, the prison sentence can be as long as 30 years.

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[1] US Attorneys Office, Jury Convicts Loan Officer for Role in Mortgage Fraud Scheme, Dec. 2, 2005.
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] 18 U.S.C. § 1956(a)(1)(A)(i).
[9] Id. § 1956(a)(1)(B)(i).
[10] Id. § 1956(c)(7)(A) (incorporating an offense found in 18 U.S.C. § 1961(1)).