Wednesday, July 21, 2010
Texas Attorney General Greg Abbott’s White Collar Crime and Public Integrity Section prosecuted the cases along with the district attorneys in whose jurisdiction the scheme was perpetuated.
According to court documents, Marriott orchestrated a scheme wherein residential loan applications contained false information. As a result, otherwise unauthorized applicants were approved for government-backed residential mortgage loans. Marriott and his co-conspirators profited from the falsified loan applications because the defendants were selling dozens of parcels of their own land through the family’s businesses One Way Home & Land in Navarro County and, later, Torenia Inc. in Kaufman County. By providing inaccurate loan documentation, Marriott and other family members were able to profit from property sales. When the purchasers could not afford to service the loan payments, the taxpayers were left owning the Marriotts’ property.
In a separate but related matter last month in Wilbarger County, Marriott pleaded guilty to the same charge involving a single home purchase. The district court sentenced him to nine years in prison. In that scheme, which involved a sale to a trusting relative, Marriott secured a fraudulent appraisal to inflate the value of the home, manipulated financial statements, padded original purchase documents, and turned a $27,000 profit in four months. That home is currently in foreclosure.
The defendant’s wife, Kandace Y. Marriott, 54, is currently serving a 99-year sentence after a Navarro County jury in March 2009 found her guilty of first-degree mortgage fraud. In July 2009, she was also sentenced to two 20-year terms after pleading guilty in Kaufman County. Her sister, Karen Hayes, 59, of Henderson County, is currently serving an 18-year sentence for falsifying documents to obtain property or credit. The Marriotts’ daughter, Kally Marriott, 24, of Rockwall, was also charged with engaging in organized criminal activity for securing the execution of a document by deception. She pleaded guilty to a third-degree felony last December and served four months in jail as a condition of her probation.
Today’s conclusive developments stem from the Marriott family’s involvement in a conspiracy to forge signatures and falsify home loan applications for prospective homeowners in Navarro, Kaufman, Ellis, and Henderson counties. The false loan applications involved creating and using numerous fraudulent documents containing statements the borrowers never made. The fraudulent documents were prepared for prospective low-income homeowners who otherwise would not have qualified for loans backed by the U.S. Department of Housing and Urban Development (HUD).
According to state investigators, the defendants’ scheme cost the federal government and taxpayers millions of dollars. Evidence uncovered by the state indicates that the defendants supervised the falsification of residential loan applications to ensure that the buyers’ loans would be approved by mortgage lenders. Investigators found that the defendants repeatedly falsified supporting documents and information, including the buyers’ rent payment verification statements, proof of employment and information about Social Security Administration benefits, among other documents.
Investigators brought evidence that the defendants manipulated government loan paperwork for lower-income purchasers who otherwise would be ineligible for loans, but whose loans were then guaranteed by HUD. As a result, when unqualified buyers defaulted on their home loans, mortgage lenders did not suffer the loss. HUD, as guarantor of the loans, had to cover these costs. In the Navarro County scheme alone, investigators believe the defendants cost the taxpayers more than $3 million.
The Office of the Attorney General initially worked with the Corsicana Police Department to hatch the investigation. The Attorney General’s investigators also received assistance from the Navarro and Kaufman County Criminal District Attorney’s Offices, the FBI and HUD’s Office of Inspector General. Attorney General Abbott’s Criminal Prosecutions Division led the prosecution of the four defendants with the cooperation of district attorneys’ offices in Navarro, Kaufman, Henderson, and Ellis counties.