Sacramento Man Found Guilty of Money Laundering
SACRAMENTO, CA- After a six-day trial in a mortgage fraud case, a federal jury found Leonard E. Williams, 52, of Sacramento, guilty today of conspiracy to commit mail and wire fraud and two counts of money laundering, United States Attorney Benjamin B. Wagner announced. The trial was held before United States District Judge William B. Shubb.
According to evidence presented at trial, from late 2006 into 2008, Williams conspired with others to carry out a mortgage fraud scheme in the Chico and Sacramento areas using his companies Diamond Hill Financial and Bay Area Real Estate Holdings. The scheme resulted in the issuance of more than $2 million in home loans, with most of the buyers ultimately defaulting.
To carry out the scheme, Williams and his partner Joshua Clymer recruited underqualified buyers, including family and friends, to purchase homes with promises of cash back, no money down, and illusory equity in the homes. Williams and his co-conspirators assisted these home buyers in securing loans with fraudulent loan applications that contained lies about the buyers' employment, income, assets, and intent to occupy the homes as a primary residence. In most cases, at Williams' suggestion and encouragement, the loan applications falsely stated that the buyers worked at Diamond Hill Financial, and Williams himself maintained the charade by confirming this false information when lenders called to verify it.
The loan applications also listed false assets and were accompanied by various forged documents, including altered bank statements, fake W-2s, fake paystubs, and false gift letters and affidavits. Williams and his coconspirators also misled lenders about the true purchase price of the homes by fraudulently indicating down payments were made when in fact they were not, and giving cash back to buyers outside of escrow, without disclosing these facts to the lenders. These lies had the effect of increasing the amount of the loans to the buyers, which in turn increased the profits of the fraud to Williams, Clymer, and others. The profit to Williams and Clymer varied from $5,000 to over $30,000 per transaction, with the two of them often splitting the proceeds.
"Fraud like that committed by Williams and his co-conspirators was an unnecessary contributor to the financial crisis that had such a serious impact on our country, and our communities in Northern California in particular," said United States Attorney Wagner. "Even though the flood of foreclosures resulting from that crisis has started to subside, this conviction is evidence of the continuing commitment by my office and our federal and local law enforcement partners to hold accountable those who sought to profit by engaging in mortgage fraud."
"Victims of mortgage fraud may include the banks that loan the money, but also include all homeowners and would-be homeowners who end up paying for this type of fraud," said Jos M. Martnez, Special Agent in Charge, IRS-Criminal Investigation. "IRS-CI is committed to pursuing those who line their pockets with profits from these schemes."
Judge Shubb remanded Williams into custody pending sentencing. Prior to trial, co-defendant Joshua Clymer pleaded guilty to conspiracy to commit mail and wire fraud and awaits sentencing.
This case is the product of an investigation by the Federal Bureau of Investigation, Internal Revenue Service, Criminal Investigations, and the Butte County District Attorney's Office's Major Crimes Unit.
illiams is the last of 14 defendants who have been convicted of mortgage fraud offenses in connection with this and related cases. Others who already been convicted and sentenced include William E. Baker, Shane Burreson, Christopher M. Chiavola, Carlos Chamorro, Eric Clawson, Niche Fortune, Garret Gililland, Kesha Haynie, Remy Heng, Nicole Magpusao, Brandon Resendez, and Anthony Symmes. Twelve of the defendants pleaded guilty. Juries have convicted the two defendants who went to trial, Williams and Haynie. Assistant United States Attorneys Christopher S. Hales and Audrey B. Hemesath are prosecuting the case.
Williams is scheduled to be sentenced by Judge Shubb on October 27, 2014. Williams faces a maximum statutory penalty of 20 years in prison for conspiracy to commit mail and wire fraud, and 10 years in prison and a $250,000 fine for each count of money laundering. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.