Kansas City Couple Await Jury Verdict on Mortgage Fraud Case

Executive Katheryn Shields and her husband, Philip Cardarella, are on trial along with Monty Kinman and Rick Peterson in connection with the proposed $1.2 million sale of Sheilds’ house last year.[1] The house had been on the market for about $700,000. Federal prosecutors alleged that the defendants were part of a conspiracy to sell the Kansas City home at an inflated price.[2] It is asserted that this occurred when Shields and Cardarella allegedly signed closing documents that falsely misstated a $1.2 million sales contract price for the home.[3]

The jury deliberated about four hours Friday in Kansas City before heading home for the weekend, and resumed deliberations about 8:20 AM on Nov. 5.[4]

Shields and Cardarella are charged with mortgage fraud which is covered under 18 U.S.C. § 225 which is also called continuing financial crimes enterprise and it states that whoever organizes, manages, or supervises a continuing financial crimes enterprise; and receives $5,000,000 or more in gross receipts from such enterprise during any 24-month period, shall be fined not more than $10,000,000 if an individual, or $20,000,000 if an organization, and imprisoned for a term of not less than 10 years and which may be up to life.[5] For purposes of subsection (a), the term “continuing financial crimes enterprise” means a series of violations under section 215, 656, 657, 1005, 1006, 1007, 1014, 1032, or 1344 of this title, or section 1341 or 1343 affecting a financial institution, committed by at least 4 persons acting in concert.[6]

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.[7] The punishment for a violation of section 371 is a fine, imprisonment for up to 5 years, or both.[8]

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[1] Tony Rizzo, Jury deliberations continue in Shields’ mortgage fraud case, The Kansas City Star, Nov. 05, 2007, available at http://www.kansascity.com/news/breaking_news/story/347274.html (last visited November 5, 2007).
[2] Id.
[3] Id.
[4] Id.
[5] 18 U.S.C. § 225(a)(2007).
[6] Id., at §225(b).
[7] 18 U.S.C. § 371(2007).
[8] Id.