Man goes to prison for mortgage fraud in Caldwell County

Aug. 13, 2014 @ 03:10 PM

STATESVILLE – A former sales manager for the Hudson office of a manufactured-housing company was sentenced Wednesday to two and half years in federal prison for his role in a mortgage and consumer fraud conspiracy.

Roger Dean Bailey Jr., 41, of Hickory, formerly a sales manager with Homes America, was accused of convincing customers to buy manufactured and modular homes they could not afford by misrepresenting the financing terms, including that Homes America – a sales branch of manufactured housing retailer Phoenix Housing Group – had a rent-to-own program, which it did not.

Court records indicate that Bailey was able to get mortgage loans for unqualified customers by providing lenders with documents that contained fraudulent information, including false income, false assets, and false credit. According to court records, in some instances Bailey also obtained inflated appraisals, misrepresented the source of down payment funds, and coerced consumers to sign closing documents.

Court records indicate that from 2004 to 2008 Bailey was involved with the origination of up to 154 fraudulent HUD/FHA-insured mortgage loans worth over $16 million.

On some occasions, Bailey also collected down payment money from borrowers, but the borrowers received no credit for the down payment, the U.S. Attorney’s Office for the Western District of North Carolina said.

Bailey pleaded guilty in October 2011 to conspiracy and fraud charges. In addition to the prison term, U.S. District Judge Richard L. Voorhees also ordered Bailey to serve two years under supervised probation and to pay restitution, the amount of which will be determined at a later date.

According to court records, of the 154 loans issued based on the false information provided by Bailey, 74 of those loans (totaling more than $9 million) were originated by a single loan officer, Marina McCuen, who worked in the Asheville office of W.R. Starkey Mortgage, a mortgage loan company approved to originate loans insured by the FHA or guaranteed by USDA. McCuen, 50, was sentenced on Aug. 4 to 50 months in prison and one year of supervised release for her role in the conspiracy.

In addition to Bailey and McCuen, five others in this case have pleaded guilty and are awaiting sentencing:

* Dennis Wayne Parris, 56, of Pinehurst, a senior vice president at Phoenix, pleaded guilty in April 2014 to conspiracy to make false statements to a federal agency, submitting false statements to HUD, and destroying records in a federal investigation.

* Fabian Sparrow, 36, of Burlington, a sales manager at Phoenix’s sales center in Burlington, pleaded guilty in June 2014 to conspiracy to make false statements to a federal agency and submitting false statements to HUD.

* Andrew B. McKeown, 40, of Asheboro, a sales manager at Phoenix’s sales center in Asheboro, pleaded guilty in January 2014 to concealing the conspiracy to defraud the government and consumers.

* Isaac “Ike” A. Vinson IV, 47, of Pawley’s Island, S.C., pleaded guilty in November 2013 to conspiracy to make false statements to a federal agency, submitting false statements to HUD, and destroying records in a federal investigation. Vinson was a Starkey Mortgage branch manager and loan officer in Myrtle Beach, S.C., and supervised McCuen.

* Joseph Klakulak, 37, of Charlotte, a loan officer for Starkey’s Charlotte office, pleaded guilty in August 2013 to conspiracy to make false statements to a federal agency and submitting false statements to HUD.

Court records show that Bailey, Parris, Sparrow and McKeown sold a total of more than 1,100 homes to North Carolina consumers, financed with more than $158 million in government-insured loans. The fraudulent loans resulted in hundreds of mortgage insurance claims totaling more than $24 million and net losses to the United States exceeding $16 million at the time that charges were filed.

In January 2011, Phoenix ceased business operations as part of a settlement with the Consumer Protection Division of the North Carolina Attorney General’s office.