Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 1 of 34 NELSON P. COHEN UNITED STATES ATTORNEY CRANDON RANDELL Assistant U.S. Attorney KEVIN FELDIS Assistant U.S. Attorney Federal Building & U.S. Courthouse 222 West Seventh Avenue, Room 253, #9 Anchorage, Alaska 99513-7567 Phone: (907 271-5071 Fax: (907 271-1500 Email: crandon.randell@usdoj.gov kevin.feldis@usdoj.gov IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ALASKA UNITED STATES OF AMERICA, vs. Plaintiff, LANCE LOCKARD, GARY PATERNA, CHARLES CARLSON, HOLLI STROUD, JONATHAN RUF, KEITH FACER, DON MURRAY, CERISE SANDERS, SUSAN McCREADY and ALASKA STATE MORTGAGE COMPANY, INC., Defendants. No. 3:07-cr-00148-RRB-JDR COUNT 1: CONSPIRACY Vio. 18 U.S.C. 371 COUNTS 2-48: WIRE FRAUD Vio. 18 U.S.C. 1343 COUNTS 49-56: BANK FRAUD Vio. 18 U.S.C. 1344(2 COUNTS 57-64: FALSE STATEMENTS Vio. 18 U.S.C. 1014 COUNT 65: CRIMINAL FORFEITURE Vio. 18 U.S.C. 981(a(1(C and 28 U.S.C. 2461(c
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 2 of 34 S E C O N D S U P E R S E D I N G I N D I C T M E N T The grand jury charges that: GENERAL ALLEGATIONS At all times material to this indictment: The Defendants 1. LANCE LOCKARD ( LOCKARD was a real estate agent and was in the business of real estate investments. He was also the sole proprietor of a real estate firm called Overlooked Properties. While at Overlooked Properties, LOCKARD was a real estate broker licensed by the State of Alaska. 2. GARY PATERNA ( PATERNA was a real estate investor. GARY PATERNA was also the father-in-law of LANCE LOCKARD. 3. JONATHAN RUF ( RUF was an individual residing in Anchorage and was engaged in the business of remodeling and building properties. 4. CHARLES CARLSON ( CARLSON was a real estate appraiser licensed by the State of Alaska. 5. HOLLI STROUD ( STROUD was a loan closer working at Land Title Company, Stewart Title, and Alyeska Title Company. Her responsibilities included preparing the closing documents for real estate transactions, including preparation of the Settlement Statement. The Settlement Statement is required to truthfully state all fees and 2
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 3 of 34 costs associated with the transaction and to accurately document all the disbursements and receipts of monies for all parties in said transaction. 6. KEITH FACER ( FACER was a real estate agent licensed by the State of Alaska. As a real estate agent, FACER s responsibilities included representing buyers and sellers in the purchases and sales of properties. While working as a real estate agent, FACER had a fiduciary duty to provide truthful and accurate information to his clients and associated parties, including mortgage companies. As a real estate agent FACER received income in the form of commissions based on a percentage of the property sales price at closing. 7. DON MURRAY ( MURRAY was a real estate agent licensed by the State of Alaska. As a real estate agent, his responsibilities and fiduciary duties were the same as those listed above in paragraph six. Furthermore, MURRAY acted as an investor and buyer of properties from LOCKARD. 8. ALASKA STATE MORTGAGE COMPANY, INC. ( ALASKA STATE MORTGAGE, was a mortgage brokerage business located at 6633 Brayton Drive, in Anchorage, Alaska. Its business involved originating home loans that were financed by the mortgage lenders, including the mortgage lenders listed in this indictment. 9. CERISE SANDERS ( SANDERS was employed as a loan originator on and off from approximately 2003 until 2006 at ALASKA STATE MORTGAGE. As a loan originator her responsibilities included arranging mortgage financing for real estate transactions, and putting together the document packages for mortgage loans. The loans 3
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 4 of 34 were then financed by mortgage lenders that relied on ALASKA STATE MORTGAGE for the credit review of the borrowers, and the truthfulness of the representations in the documents prepared by ALASKA STATE MORTGAGE. As an employee of ALASKA STATE MORTGAGE, CERISE SANDERS worked for SUSAN McCREADY. She was paid, in part, on commission based upon the value of the loans she originated. 10. SUSAN McCREADY ( McCREADY was the owner of ALASKA STATE MORTGAGE and was CERISE SANDER s employer. McCREADY also originated loans, prepared loan documents, and arranged for mortgage lenders to lend money to buyers. The Mortgage Lenders and Title Companies 11. First National Bank Alaska ( FNBA was an insured bank and a financial institution as those terms are defined in Title 18 U.S.C. 20 and Title 31 United States Code, Section 5312(a(2. The deposits and accounts of FNBA were insured by the Federal Deposit Insurance Corporation. 12. Countrywide Home Loans ( Countrywide, Lehman Brothers, Inc. ( Lehman, Argent Mortgage Company ( Argent, Homecomings Financial LLC ( Homecomings, Entrust Mortgage ( Entrust, Peoples Choice Home Loan ( Peoples, New Century Mortgage Corporation ( New Century, Aegis Mortgage Corporation ( Aegis, Long Beach Mortgage ( Long Beach, BNC Mortgage Inc. ( BNC, Metrocities Mortgage ( Metrocities, Saxon Mortgage ( Saxon, ABN AMRO ( ABN, and Option One were companies engaged in the business of mortgage 4
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 5 of 34 lending nationwide. Alyeska Title Guaranty Agency, Stewart Title Company and Land Title Company were title companies engaged in the business of real estate closings and settlements. The mortgage companies each provided funds for closings on mortgage loans by wiring said funds from outside the State of Alaska to the title companies in Alaska that conducted the closings on each transaction. Mortgage Lending Procedures 13. The mortgage lenders listed above, in most of the transactions described herein, required a 80% loan-to-value ratio as a prerequisite for providing the loans involved in this indictment. That means that they would only loan 80% of the appraised value of the property. They required that the other 20% be provided by the buyer in the form of a down payment or other personal investment of funds. 14. In a real estate transaction, the loan originator s role is to gather the financial information and terms of the proposed purchase and place that information on the Uniform Residential Loan Application ( Form 1003". The Form 1003 is used by all lenders in residential real estate transactions and includes material information such as the buyer s assets and liabilities, the purchase price, the loan-to-value ratio, the purpose of the transaction, whether it is a purchase of a primary residence, or an investment, and whether any money has been borrowed for the down payment. The mortgage lender uses this information to assess the risks of making the loan and to determine the terms and conditions of mortgages, including whether to agree to make the loan at all. 5
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 6 of 34 15. At closing, the title company uses the information provided by real estate agents and loan originators to prepare a Settlement Statement which discloses all of the financial terms of the sale, including all monies paid by the buyer and seller toward closing, the purchase price, the amount of all payments made to the seller and monies provided by the buyer. The title companies also prepare disbursement/receipt reports for each sale. This report documents all of the incoming and outgoing funds for each transaction. This report, which should contain the same incoming and outgoing amounts as is reflected on the Settlement Statement, is used by the title companies to reconcile and document the financial transactions for each sale. The mortgage lenders are provided a copy of the final Form 1003 and Settlement Statement which are material documents that should reveal all of the relevant terms of the transaction. Appraisals/Nominee Loans/Cash Back Schemes 16. Nominee borrowers are persons who purchase properties by misstating the true purpose, purchaser and/or borrower. A nominee borrower acts as a stand-in for another person who is the true beneficiary of the financial transaction. Loan transactions involving nominees hide the true financial circumstances, purpose and nature of the purchase and also hide the true relationship among the parties to the transaction. In many cases, the nominee, as purchaser, does not make any personal investment of funds to purchase the property. Nominee loans are not permitted by any of the mortgage lenders. // // 6
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 7 of 34 17. Appraisals are conducted by appraisers licensed by the State of Alaska. Appraisers are required to follow the Uniform Standards of Professional Appraisal Practices. Appraisers are usually hired by the buyer of a property to examine the property and provide an expert opinion of the market value of that property. The appraisals are provided to the loan originator and are included in the loan file. They are relied on by the loan originators and mortgage companies to ensure that the amount they are loaning on the property does not exceed the value of the property and, in the case of 80% loan-tovalue loans, to make sure that the mortgage company has an adequate margin to cover reasonable downturns in the economy. A mortgage company does not want to loan more money than a property is worth as the mortgage company is then unsecured for the difference, putting the mortgage company at financial risk. 18. Cash back schemes ( cash backs occur when the seller of a property provides the buyer with a payment of money back after the purchase and closing that has not been disclosed to the mortgage lender. In Cash back schemes, the sales price of a property is inflated and the seller then gives a portion of that inflated amount back to the buyer of the property. Typically, a cash back transaction requires the participation of the appraiser and realtor as well as the buyer as all are involved in inflating the value of the property and falsifying the sales price. Cash back schemes are not permitted by any of the mortgage lenders. 19. A primary residence loan is a type of loan in which the buyer of the property informs the mortgage company that he or she will live at that property as a 7
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 8 of 34 primary residence. Primary residence loans are considered by mortgage lenders to be less risky than an investment loan and thus usually receive better interest rates and/or lower fees than investment loans. COUNT 1: CONSPIRACY 20. Paragraphs 1 through 19 are realleged herein. 21. Beginning at some time unknown, but at least by on or about December 23, 2003, and continuing thereafter until May 31, 2006, the exact dates being unknown to the grand jury, the defendants, LANCE LOCKARD, GARY PATERNA, CHARLES CARLSON, HOLLI STROUD, JONATHAN RUF, KEITH FACER, DON MURRAY, CERISE SANDERS, SUSAN McCREADY and ALASKA STATE MORTGAGE COMPANY, INC., and others known and unknown to the grand jury, in the District of Alaska and elsewhere, did unlawfully, and knowingly, combine, conspire, confederate and agree, with each other, to commit certain offenses against the United States, namely: (a Bank Fraud in violation of Title 18, United States Code, Section 1344(2; (b Wire Fraud in violation of Title 18, United States Code, Section 1343; and (c False Statements to Bank in violation of Title 18, United States Code, Section 1014. // // 8
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 9 of 34 PURPOSE OF THE CONSPIRACY 22. The purpose of the conspiracy was for LOCKARD, with the help of the other defendants and co-conspirators named above in each of the various real estate transactions detailed below, to obtain financing for the purchase and sale of residential real estate in Alaska from various financial institutions and mortgage companies through a pattern of providing false and fraudulent statements and documents, use of inflated appraisals, falsified down payments, nominee borrowers and purchasers, hidden cash back transactions and other illegal schemes which concealed from the mortgage lenders the true details of the financial transactions, transferred the investment risk from LOCKARD and the other co-defendants to the financial institutions and provided inflated profit to LOCKARD and co-conspirators from fraudulently inflated property values. MANNER AND MEANS 23. The manner and means by which the conspiracy was carried out included, among other things: (a Falsifying documents to reflect that down payments were made on transactions where no such down payment existed and/or borrowing money for the down payment and falsely denying that any money was borrowed on the Form 1003 in order to purchase properties with no equity investment and bypass the mortgage lender s loan-tovalue ratio requirement; // // 9
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 10 of 34 (b Providing inflated appraisals in order to falsify the sales price, acquiring 100% financing, receiving extra profit for the seller and cash back to the buyer while concealing said terms from the mortgage lenders; (c Purchasing a series of properties on the same day and identifying all of them as alleged primary residences of the same buyer on the loan applications, and further arranging to obtain loans at different mortgage lenders so as to hide the false claim that they were all primary residence and thereby obtain the more favorable terms available for primary residence loans; (d Using nominee borrowers and purchasers to disguise the true beneficiary of the financial transaction; (e Misrepresenting assets and liabilities on loan applications, and failing to reveal simultaneous and multiple real estate purchases; (f Reselling properties purchased through the fraudulent methods listed above by again using those fraudulent methods, such as cash back schemes, inflated appraisals and false down payments. (g Purchasing and re-selling real estate on the same day or within a short time period with a substantial increase in sale price and without revealing the complete and truthful circumstances of these purchases and re-sales to the mortgage lenders and others involved. 24. As a result of the conspiracy the defendants obtained financing for the sales and purchase of real estate properties in Anchorage, Alaska, in a manner that permitted them to obtain real estate, cash and profits with, in many cases, substantially less personal 10
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 11 of 34 financial risk and little if any personal investment of funds. Defendants were able to receive inflated profits from the sales of properties that they knew to be overvalued, and the defendant real estate professionals were able to obtain commissions on the closing of loans that they knew to be fraudulent. A further result of the conspiracy was to place increased market risk on the mortgage lenders and preclude said institutions from the ability to make informed decisions about their loans. Mortgage lenders were ultimately left with undercollaterized loans, and because final buyers purchased overpriced properties with higher mortgages, many of these properties went into foreclosure. 25. In furtherance of the conspiracy, the defendants obtained at least 30 loans from two banks and fourteen mortgage companies for the purchase of at least 30 different properties in Anchorage and the surrounding communities in Alaska. THE SCHEMES The Land Flips 26. It was part of the conspiracy that on three separate dates, December 23, 2003, December 29, 2003, and January 6, 2004, defendants LANCE LOCKARD and GARY PATERNA, aided and abetted by defendants CHARLES CARLSON, SUSAN McCREADY and ALASKA STATE MORTGAGE and HOLLI STROUD, arranged for the financing for the purchase and simultaneous re-sale of ten properties located at 8120 Little Dipper Avenue, 8151 Little Dipper Avenue, 8210 Little Dipper Avenue, 8141 Northwind Avenue, 8150 Northwind Avenue, 8151 Northwind Avenue, 501 Glacier Bay Circle, 530 Glacier Bay Circle, 541 Glacier Bay Circle and 521 Misty Fjords Circle, by 11
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 12 of 34 falsifying documents and inflated appraisals and purchase prices. In each of the transactions related to these properties, LOCKARD arranged to purchase the properties and immediately sell them to PATERNA. CARLSON fraudulently inflated the appraised values of the properties so that PATERNA could receive 100% financing of the actual purchase price. ALASKA STATE MORTGAGE COMPANY, INC. misrepresented the assets and liabilities of the borrower, PATERNA, by failing to disclose on the Form 1003 that PATERNA had purchased or was in the process of purchasing multiple properties in addition to the property revealed on the loan application. STROUD, acting as the closing agent for Land Title of Alaska, then wrote a fraudulent check from Land Title s bank account, using Land Title s own funds, and deposited that same check back into Land Title s bank account, so as to falsely document that PATERNA had provided a down payment when in fact no funds had been provided by PATERNA. STROUD then manipulated Land Title records to hide the fraudulent transactions. The loan proceeds were transferred to LOCKARD, who used them to finance his purchase of the properties. In addition, PATERNA acted as a nominee borrower for LOCKARD, who maintained ownership of the properties and obtained the proceeds of the sales when the properties were sold to other buyers. 27. Resale of the above properties was accomplished through further fraudulent cash-back transactions in which LOCKARD arranged for buyers to purchase the properties at an inflated sales price bolstered by inflated appraisals created by CARLSON. Upon closing, LOCKARD arranged that some of the monies to be paid back 12
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 13 of 34 to the buyer in the form of cash backs. These fraudulent arrangements were not revealed on the Form 1003 loan applications or the Settlement Statements, thus concealing the true terms of the transaction from the mortgage lenders. The Simultaneous Purchase of 13 Primary Residences 28. It was further a part of the conspiracy that on or about May 17, 2004, the defendants, LANCE LOCKARD, JONATHAN RUF, CHARLES CARLSON, HOLLI STROUD, CERISE SANDERS, SUSAN McCREADY and ALASKA STATE MORTGAGE arranged for the financing of the simultaneous purchase of 13 properties located at 510, 520, 521, 530, 531, 540 and 541 Bitterroot Circle and 520, 521, 530, 531, 540 and 541 San Juan Circle, all in Anchorage, Alaska. RUF acted as a nominee purchaser for LOCKARD in all transactions, and, in each case, claimed that he would occupy each of the 13 residences as his primary residence. CARLSON inflated the appraised values of the properties, in some instances using his own previously inflated appraisals as the comparables to establish the inflated values. SANDERS and McCREADY, acting for ALASKA STATE MORTGAGE as loan originators, caused the loans to be placed with 13 different lenders so as to hide the fact that the purchases were not, in fact, intended to be owner occupied as primary residences. SANDERS and McCREADY and ALASKA STATE MORTGAGE also failed to reveal to the mortgage lenders that RUF was in the process of purchasing multiple properties, thereby misrepresenting the true assets, liabilities and financial status of RUF. STROUD, acting as closing agent, falsified documents so as to hide the fact that no down payments were made, and all properties were purchased using 100% financing. RUF and LOCKARD 13
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 14 of 34 then arranged to sell the properties to other buyers using CARLSON s further inflated appraisals and providing concealed cash back to the ultimate buyers. 29. It was further a part of the conspiracy that KEITH FACER and DON MURRAY, while acting as licensed real estate agents, assisted and arranged to sell properties located in Anchorage, Alaska, at 510, 520, 521, 540 and 541 Bitterroot Circle, 520, 521, 530, 540 and 541 San Juan Circle, and 501 and 530 Glacier Bay Circle to buyers at inflated prices. FACER and MURRAY assisted LOCKARD in knowingly arranging fraudulent cash back transactions for each of the above transactions. Furthermore, MURRAY also purchased and received cash back from LOCKARD as the purchaser of properties located at 501, 530, and 541 Glacier Bay Circle, and 520 San Juan as well as 540 and 541 Bitterroot Circle. Property Provided to STROUD 30. It was further a part of the conspiracy that on or about September 16, 2005, LANCE LOCKARD, CHARLES CARLSON, and HOLLI STROUD, arranged for the sale of property located in Anchorage, Alaska, at 510 Misty Fjords Circle, by LOCKARD to STROUD through the use of false and fraudulent loan documents. LOCKARD provided the down payment for the purchase to the buyer, STROUD, and STROUD failed to disclose this fact to the mortgage lender. CARLSON inflated the appraised value of the property resulting in mortgage lenders being deceived about the true value of the property and the debt to loan value involved in the mortgage. LOCKARD further agreed to sell the property to STROUD at a lower inflated price than provided to other buyers for 14
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 15 of 34 similar properties located in the same area. Nominee Loan, Falsified Down Payment and Land Flip at 5163 South Emerald Way 31. It was further a part of the conspiracy that on or about August 10, 2005, LANCE LOCKARD, GARY PATERNA, CHARLES CARLSON, JONATHAN RUF and HOLLI STROUD arranged for the nominee purchase, sale and financing of property located in Anchorage, Alaska, at 5163 South Emerald Way (also referred to as 5173 South Emerald Way, using false and fraudulent documentation to disguise the true purchasers, price and value. PATERNA first purchased the property as a nominee purchaser for LOCKARD. CARLSON then reappraised the property at an inflated value and RUF purchased the property from PATERNA using the inflated value to obtain 100% financing from FNBA. PATERNA and RUF, aided by STROUD, provided false information in the loan application and the Settlement Statement to reflect a down payment that never existed and thereby falsely conceal the true price. Other Falsified Down Payment/Land Flips 32. It was further a part of the conspiracy that LANCE LOCKARD, GARY PATERNA, CHARLES CARLSON and HOLLI STROUD arranged for the sale and financing of seven properties located in Anchorage, Wasilla and Talkeetna, Alaska, located at 3123 E. 43rd Avenue, Anchorage; 3707 E. 65th Avenue, Anchorage; 5501 E. th rd 97 Avenue, Anchorage; 000 Meyer Street, Anchorage; 1811 East 73 Avenue, Anchorage; 000 Lewis Parkway, Wasilla; and 000 Montana Creek Road, Talkeetna, through a pattern of false and fraudulent documentation, inflated prices and appraisals 15
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 16 of 34 and nominee loans. The loans to purchase these properties were all obtained from FNBA. 33. It was further a part of the conspiracy that LOCKARD arranged for rd PATERNA to sell properties located at 1811 E. 73 Avenue in Anchorage and 000 Meyer Street in Anchorage to LOCKARD. PATERNA acted as nominee for LOCKARD on both transactions and LOCKARD obtained the proceeds of the sales. CARLSON inflated the appraisal for the Meyer property. STROUD created fraudulent Settlement Statements that falsely reflected cash from borrower of $53,405.26 and $17,976.28 respectively, knowing that no such proceeds had been provided by LOCKARD. LOCKARD received the proceeds of the FNBA loans from PATERNA and then defaulted on the loans. 34. It was further a part of the conspiracy that LOCKARD arranged for PATERNA to purchase property located at 000 Montana Creek Road, Talkeetna, and then to immediately re-sell the property to LOCKARD at a much higher price through the use of CARLSON s inflated appraisal. LOCKARD arranged to receive the loan funds for himself and he never paid the down payment shown on the Settlement Statement. LOCKARD later defaulted on the loan. 35. It was further a part of the conspiracy that PATERNA purchased property located at 000 Lewis Parkway in Wasilla, through the use of CARLSON s inflated appraisal. LOCKARD and PATERNA caused the Settlement Statement to falsely state that PATERNA had made a down payment. The seller provided the proceeds of the loan 16
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 17 of 34 to LOCKARD. 36. It was further a part of the conspiracy that PATERNA purchased property th located at 5501 E. 97 Avenue in Anchorage, and then the property was re-sold on the same date to LOCKARD through the use of CARLSON s inflated appraisal. STROUD created a false Settlement Statement detailing a down payment never paid by LOCKARD, who defaulted on the loan. 37. It was further a part of the conspiracy that LOCKARD bought property rd located at 3123 E. 43 Avenue in Anchorage. STROUD created a false Settlement Statement detailing a down payment never paid by LOCKARD, and the seller provided the proceeds of the loan to LOCKARD, who defaulted on the loan. 38. It was further a part of the conspiracy that LOCKARD bought property th located at 3707 E. 65 Avenue in Anchorage. STROUD created a false Settlement Statement detailing a down payment never paid by LOCKARD. 39. As a result of the conspiracy to date, the defendants have caused over $1,500,000 in losses to various mortgage lenders through foreclosures on the above identified properties financed through the false and fraudulent actions of the conspirators listed above. // // // 17
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 18 of 34 OVERT ACTS 40. In furtherance of the conspiracy, and in order to effect the objects thereof, the defendants committed numerous overt acts within the District of Alaska, including but not limited to the following: (a On December 23, 2003, LOCKARD purchased three properties located at 8120, 8151, and 8210 Little Dipper Avenue, in Anchorage, Alaska, and simultaneously sold the same properties to PATERNA who acted as a nominee purchaser. In connection with the sales to PATERNA, CARLSON inflated the appraisals for the property, McCREADY and ALASKA STATE MORTGAGE failed to reveal to the lender that PATERNA was in the process of buying additional properties, and STROUD falsified title company documents. (b On or about December 29, 2003, LOCKARD purchased three properties located at 8141, 8150, and 8151 Northwind Avenue, in Anchorage, Alaska, and simultaneously sold the same properties to PATERNA who acted as a nominee purchaser. In connection with the sales to PATERNA, CARLSON inflated the appraisals for the property, McCREADY and ALASKA STATE MORTGAGE failed to reveal to the lender that PATERNA was in the process of purchasing other properties, and that PATERNA had made multiple purchases on December 23, 2003. STROUD also falsified title company documents. (c On or about January 6, 2004, LOCKARD purchased four properties located at 501, 530, and 541 Glacier Bay Circle, and 521 Misty Fjords Circle, in 18
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 19 of 34 Anchorage, Alaska, and simultaneously sold the same properties to PATERNA, who acted as a nominee purchaser. In connection with the sales to PATERNA, CARLSON inflated the appraisals for the property, McCREADY and ALASKA STATE MORTGAGE failed to reveal to the lender that PATERNA had purchased multiple additional properties in December, 2003, and STROUD falsified title company documents. (d On or about May 17, 2004, LOCKARD arranged for RUF to purchase13 properties located at 510, 520, 521, 530, 531, 540 and 541 Bitterroot Circle, and 520, 521, 530, 531, 540 and 541 San Juan Circle, in Anchorage, Alaska. In connection with these transactions, McCREADY and ALASKA STATE MORTGAGE and SANDERS arranged to finance the purchases through 13 different lenders and caused the Form 1003's to falsely state that all 13 purchases were intended as a primary residence. RUF provided false signed statements for some of the loan files. CARLSON inflated the appraisals on all properties. In addition, LOCKARD provided concealed cash back payments to the buyer. (e On or about March 1, 2005, LOCKARD and PATERNA sold the properties located at 8151 Little Dipper and 8141 and 8150 Northwind using inflated appraisals provided by CARLSON. In addition, LOCKARD provided concealed cash back payments to the buyers. (f On or about March 2, 2005, LOCKARD and PATERNA sold the property located at 8120 Little Dipper using an inflated appraisal provided by 19
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 20 of 34 CARLSON. In addition, LOCKARD provided concealed cash back payments to the buyer. (g On or about March 23, 2005, LOCKARD and PATERNA sold the property located at 541 Glacier Bay Avenue using an inflated appraisal provided by CARLSON. In addition, LOCKARD provided concealed cash back payments to the buyer. (h On or about March 29, 2005, LOCKARD and PATERNA sold the property located at 8210 Little Dipper using an inflated appraisal provided by CARLSON. In addition, LOCKARD provided concealed cash back payments to the buyer. (i On or about April 7, 2005, LOCKARD purchased the property located rd at 3123 E. 43 Avenue from a nominee seller and LOCKARD received the proceeds of the sale. (j On or about April 11, 2005, through July 19, 2005, LOCKARD and RUF sold the properties located at 540 and 541 Bitterroot and 520, 521, 540 and 541 San Juan and 501 Glacier Bay using inflated appraisals provided by CARLSON. MURRAY acted as the real estate agent, and together the LOCKARD, RUF and MURRAY provided concealed cash-back payments to the buyers as incentives for the buyers to purchase the properties. // // 20
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 21 of 34 (k On or about May 6, 2005, LOCKARD and RUF sold the property located at 530 Bitterroot using an inflated appraisal provided by CARLSON. In addition, LOCKARD provided concealed cash back payments to the buyer. (l On or about May 13, 2005, LOCKARD and RUF sold the property located at 510 Bitterroot using an inflated appraisal provided by CARLSON. In addition, LOCKARD provided concealed cash back payments to the buyer. (m On or about May 13, 2005, through July 25, 2005, LOCKARD and RUF sold the properties located at 521 and 520 Bitterroot and the property located at 530 San Juan using inflated appraisals provided by CARLSON. FACER acted as the real estate agent, and LOCKARD, RUF and FACER provided concealed cash back payments to the buyers as incentives for the buyers to purchase the properties. (n On or about May 18, 2005, LOCKARD and RUF sold the property located at 521 San Juan using an inflated appraisal provided by CARLSON. In addition, LOCKARD provided concealed cash back payments to the buyer. (o On or about May 18, 2005, LOCKARD and PATERNA sold the property located at 8151 Northwind using an inflated appraisal provided by CARLSON. In addition, LOCKARD provided concealed cash back payments to the buyer. (p On or about May 27, 2005, LOCKARD and RUF sold the property located at 541 San Juan using an inflated appraisal provided by CARLSON. In addition, LOCKARD provided concealed cash back payments to the buyer. 21
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 22 of 34 (q On or about June 7, 2005, LOCKARD and RUF sold the property located at 540 San Juan using an inflated appraisal provided by CARLSON. In addition, LOCKARD provided concealed cash back payments to the buyer. (r On or about June 17, 2005, LOCKARD and RUF sold the properties located at 531 Bitterroot and 531 San Juan using an inflated appraisal provided by CARLSON. In addition, LOCKARD provided concealed cash back payments to the buyer. (s On or about June 30, 2005, PATERNA, acting as a nominee seller for rd LOCKARD, sold the properties located at 1811 East 73 Avenue and 000 Meyer Street to LOCKARD. CARLSON inflated the appraisal for the Meyer Street property, and STROUD falsified title company documents. (t On or about June 30, 2005, PATERNA, acting as a nominee seller for th LOCKARD, sold the property located at 5501 E. 97 Avenue in Anchorage, Alaska, to LOCKARD. CARLSON inflated the appraisal, and STROUD falsified title company documents. (u Between on or about July 14, 2005, and July 25, 2005, LOCKARD and RUF sold the properties located at 521 Misty Fjords, 520, 521 and 531 Bitterroot using inflated appraisals provided by CARLSON. In addition, LOCKARD provided concealed cash back payments to the buyer. (v On or about August 10, 2005, PATERNA purchased the property located at 5163 South Emerald Way (also referred to as 5173 South Emerald Way, 22
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 23 of 34 Anchorage, Alaska, and simultaneously sold the property to RUF at an inflated amount based upon an inflated appraisal provided by CARLSON. STROUD falsified the title company documents. (w On or about September 16, 2005, STROUD purchased the property located at 510 Misty Fjords Circle using an inflated the appraised provided by CARLSON. STROUD provided false information to obtain the loan. LOCKARD provided the money for the down payment which STROUD caused to be concealed on the loan documents. (x On or about October 4, 2005, LOCKARD purchased the property th located at 3707 E. 65 Avenue in Anchorage. STROUD falsified the title company documents. (y On or about May 26, 2006, PATERNA purchased the property located at 000 Lewis Parkway as a nominee purchaser for LOCKARD using an inflated appraisal provided by CARLSON. (z On or about May 31, 2006, LOCKARD purchased the property located at 000 Montana Creek Road in Talkeetna using an inflated appraisal provided by CARLSON. 41. As of the date of this indictment the defendants illegal actions have resulted in approximately twenty foreclosures with losses of over $1,500,000, illegal // // 23
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 24 of 34 profits to LOCKARD and the other co-conspirators of over $2,000,000, and cash backs to buyers, not including LOCKARD, RUF, or PATERNA, of over $900,000. All of which is in violation of Title 18, United States Code, Section 371. COUNTS 2-48: WIRE FRAUD 42. Paragraphs 1 through 19 and 21 through 41 are realleged and incorporated herein. 43. Beginning at a date unknown but at least on or about December 23, 2003, and continuing thereafter until on or about September 16, 2005, the exact dates being unknown to the grand jury, the defendants, LANCE LOCKARD, GARY PATERNA, CHARLES CARLSON, HOLLI STROUD, JONATHAN RUF, KEITH FACER, DON MURRAY, CERISE SANDERS, SUSAN McCREADY and ALASKA STATE MORTGAGE COMPANY, INC., and others known and unknown to the grand jury, in the District of Alaska, knowingly executed and attempted to execute a material scheme and artifice to obtain moneys, funds, credits and assets owned by and under the custody and control of Countrywide, Lehman, Argent, Entrust, People s Choice, New Century, Aegis, Long Beach, Saxon, ABN AMRO, BNC, Metrocities, Option One, and Homecomings by means of material false and fraudulent pretenses, representations and promises. 44. The substance of the scheme and its manner and means are described in paragraphs 1 through 19 and paragraphs 21 through 41of this indictment. For the purpose of executing and attempting to execute the above described scheme and artifice, the 24
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 25 of 34 defendants did knowingly cause to be transmitted in interstate commerce by means of a wire communication certain signals and sounds, to wit: wire transfers of funds at the closing of each real estate transaction from outside the state of Alaska to Alaska. Each wire transfer is alleged as a separate and distinct count as identified by count number, defendants charged, property, lender and on or about date of wiring as follows: Count Defendant[s] Charged Property Involved/Lender Wiring/Date (on or about 2 LOCKARD; PATERNA; STROUD; CARLSON 8120 Little Dipper Countrywide 12/23/03 3 LOCKARD; PATERNA; STROUD; CARLSON 8151 Little Dipper Countrywide 12/23/03 4 LOCKARD; PATERNA; STROUD; CARLSON 8210 Little Dipper Argent 12/23/03 5 LOCKARD; PATERNA; STROUD; CARLSON 8141 Northwind Countrywide 12/29/03 6 LOCKARD; PATERNA; STROUD; CARLSON 8150 Northwind Argent 12/29/03 7 LOCKARD; PATERNA; STROUD; CARLSON 8151 Northwind Countrywide 12/29/03 8 LOCKARD; PATERNA; STROUD; CARLSON 501 Glacier Bay Homecomings 1/6/04 9 LOCKARD; PATERNA; STROUD; CARLSON 530 Glacier Bay Homecomings 1/6/04 25
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 26 of 34 10 LOCKARD; PATERNA; STROUD; CARLSON 541 Glacier Bay Homecomings 1/6/04 11 LOCKARD; PATERNA; STROUD; CARLSON 521 Misty Fjords Homecomings 1/6/04 12 LOCKARD; CARLSON; RUF; McCREADY; SANDERS; ALASKA STATE MORTGAGE 510 Bitterroot Entrust 5/17/04 13 LOCKARD; STROUD; CARLSON; RUF; McCREADY; SANDERS; ALASKA STATE MORTGAGE 520 Bitterroot People s Choice 5/17/04 14 LOCKARD; CARLSON; RUF; McCREADY; SANDERS; ALASKA STATE MORTGAGE 521 Bitterroot New Century 5/17/04 15 LOCKARD; STROUD; CARLSON; RUF; McCREADY; SANDERS; ALASKA STATE MORTGAGE 530 Bitterroot Aegis 5/17/04 16 LOCKARD; STROUD; CARLSON; RUF; McCREADY; SANDERS; ALASKA STATE MORTGAGE 531 Bitterroot Option One 5/17/04 26
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 27 of 34 17 LOCKARD; STROUD; CARLSON; RUF; McCREADY; SANDERS; ALASKA STATE MORTGAGE 540 Bitterroot Saxon 5/17/04 18 LOCKARD; STROUD; CARLSON; RUF; McCREADY; SANDERS; ALASKA STATE MORTGAGE 541 Bitterroot Long Beach 5/17/04 19 LOCKARD; STROUD; CARLSON; RUF; McCREADY; SANDERS; ALASKA STATE MORTGAGE 520 San Juan First Banc 5/17/04 20 LOCKARD; STROUD; CARLSON; RUF; McCREADY; SANDERS; ALASKA STATE MORTGAGE 521 San Juan ABN AMRO 5/17/04 21 LOCKARD; STROUD; CARLSON; RUF; McCREADY; SANDERS; ALASKA STATE MORTGAGE 530 San Juan Homecomings 5/17/04 22 LOCKARD; STROUD; CARLSON; RUF; McCREADY; SANDERS; ALASKA STATE MORTGAGE 531 San Juan Countrywide 5/17/04 27
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 28 of 34 23 LOCKARD; STROUD; CARLSON; RUF; McCREADY; SANDERS; ALASKA STATE MORTGAGE 540 San Juan Argent 5/17/04 24 LOCKARD; STROUD; CARLSON; RUF; McCREADY; SANDERS; ALASKA STATE MORTGAGE 541 San Juan Flagstar 5/17/04 25 LOCKARD; CARLSON 8151 Little Dipper Long Beach 26 LOCKARD 8141 Northwind Long Beach 27 LOCKARD; CARLSON 8150 Northwind Long Beach 28 LOCKARD; CARLSON 8120 Little Dipper Long Beach 29 LOCKARD; CARLSON 541 Glacier Bay Argent 30 LOCKARD; CARLSON 8210 Little Dipper Argent 3/1/05 3/1/05 3/1/05 3/2/05 3/24/05 3/29/05 31 LOCKARD; CARLSON; MURRAY 501 Glacier Bay Lehman 4/11/05 32 LOCKARD; CARLSON 530 Glacier Bay Lehman 4/11/05 33 LOCKARD; CARLSON; MURRAY 520 San Juan Long Beach 4/20/05 34 LOCKARD; CARLSON 530 Bitterroot Argent 5/6/05 28
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 29 of 34 35 LOCKARD; CARLSON; FACER 510 Bitterroot Long Beach 5/13/05 36 LOCKARD; CARLSON; MURRAY 521 San Juan Long Beach 5/18/05 37 LOCKARD; CARLSON 8151 Northwind Flagstar 5/19/05 38 LOCKARD; CARLSON; MURRAY 541 San Juan Argent 5/27/05 39 LOCKARD; CARLSON; MURRAY 540 San Juan New Century 6/7/05 40 LOCKARD 531 Bitterroot Long Beach 6/17/05 41 LOCKARD 531 San Juan Long Beach 6/17/05 42 LOCKARD; CARLSON; FACER 530 San Juan New Century 7/14/05 43 LOCKARD; CARLSON; FACER 520 Bitterroot BNC 7/18/05 44 LOCKARD; CARLSON; MURRAY 540 Bitterroot Metrocities 7/19/05 45 LOCKARD; CARLSON; MURRAY 541 Bitterroot Metrocities 7/19/05 46 LOCKARD; CARLSON 521 Misty Fjords Homecomings 7/20/05 29
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 30 of 34 47 LOCKARD; CARLSON; FACER 521 Bitterroot Argent 7/25/05 48 LOCKARD; STROUD; CARLSON 510 Misty Fjords New Century 9/16/05 All of which is in violation of Title 18, United States Code, Sections 1343 and 2. COUNTS 49-56: BANK FRAUD 45. Paragraphs 1 through 19 and 21 through 41are realleged and incorporated herein. 46. Beginning at a date unknown but at least on or about May 17, 2004, and continuing thereafter until on or about May 31, 2006, the exact dates being unknown to the grand jury, the defendants, LANCE LOCKARD, GARY PATERNA, CHARLES CARLSON, HOLLI STROUD, JONATHAN RUF, and others known and unknown to the grand jury, in the District of Alaska, knowingly executed and attempted to execute a material scheme and artifice to obtain moneys, funds, credits and assets owned by and under the custody and control of FNBA, a financial institution as defined under 18 U.S.C. 20, the accounts of which were insured by the Federal Deposit Insurance Corporation, by means of material false and fraudulent pretenses, representations and promises. Each // // // 30
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 31 of 34 execution of the bank fraud scheme is alleged as a separate and distinct count identified below by count number, defendants charged, property and lender: Count Defendant[s] Charged Property Involved/Lender Wiring/Date (on or about 49 LOCKARD rd 3123 E. 43 Ave. FNBA 4/7/05 50 LOCKARD; STROUD; PATERNA 1811 E. 73 rd FNBA 6/30/05 51 LOCKARD; STROUD; CARLSON 52 LOCKARD; STROUD; CARLSON 53 LOCKARD; STROUD; CARLSON; RUF 000 Meyer St FNBA th 5501 E. 97 Ave. FNBA 5163 S. Emerald (aka 5173 S. Emerald Way FNBA 6/30/05 6/30/05 8/10/05 54 LOCKARD; STROUD 3707 E. 65th FNBA 55 LOCKARD; CARLSON Montana Creek FNBA 10/4/05 5/26/06 56 LOCKARD; CARLSON; PATERNA 000 Lewis Parkway FNBA 5/31/06 All of which is in violation of Title 18, United States Code, Sections 1344(2 and 2. COUNTS 57-64: FALSE STATEMENTS 47. Paragraphs 1 through 19 and 21 through 41 are realleged herein. 48. Between on or about April 7, 2005, and May 31, 2006, in the District of 31
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 32 of 34 Alaska, the defendants, LANCE LOCKARD, GARY PATERNA HOLLI STROUD, and JONATHAN RUF knowingly made false statements for the purpose of influencing the action of FNBA, a financial institution the accounts of which are insured by the Federal Deposit Insurance Corporation, in that the defendants caused false Settlement Statements to be created and provided to FNBA for the purchase of certain residential property in Anchorage, Alaska, with each Settlement Statement falsely listing cash or other money from the borrower representing alleged equity in the transaction when, as the defendants well knew, no such monies were provided. Each false statement is alleged as a separate and distinct count and is identified by count number, defendants charged, date of the false Settlement Statement, the property to which the false Settlement Statement pertained, and amount of money falsely stated on the Settlement Statement as money from the borrower: Count Defendant[s] Charged Date (on or about Property False Statement/Alleged Money from Borrower rd 57 LOCKARD 4/7/05 3123 E. 43 Ave $57,758.63 58 LOCKARD; STROUD; PATERNA 59 LOCKARD; STROUD rd 6/30/05 1811 E. 73 $17,976.28 th 6/30/05 5501 E. 97 Ave. $83,200.67 60 LOCKARD; STROUD 6/30/05 000 Meyer St $53,405.26 61 LOCKARD; STROUD; RUF 8/10/05 5163 S. Emerald Way (aka 5173 S. Emerald Way $112,781.93 32
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 33 of 34 62 LOCKARD; STROUD th 10/4/05 3707 E. 65 Ave. $26,430.60 63 LOCKARD 5/26/06 Montana Creek $200,938.30 64 LOCKARD; PATERNA 5/31/06 000 Lewis Parkway $250,884.12 All of which is in violation of Title 18, United States Code, Section 1014. CRIMINAL FORFEITURE COUNT 65: CRIMINAL PROCEEDS Upon conviction of Count 1 of this Second Superseding Indictment, defendant Lance Lockard shall forfeit to the United States approximately $116,000.00 IN UNITED STATES DOLLARS, i.e., all funds in that certain account with Global Forex Trading in the name of Lance Lockard, account # 283087, property, real or personal, which constitutes or is derived from proceeds traceable to an offense constituting specified unlawful activity (as defined in 18 U.S.C. 1956(c(7, or a conspiracy to commit such an offense, pursuant to 18 U.S.C. 981(a(1(C and 28 U.S.C. 2461(c. a. Money Judgment A sum of money equal to approximately $116,000.00 IN UNITED STATES DOLLARS, representing the amount of proceeds obtained as a result of the offenses described in Count 1 hereof. b. Substitute Assets If any of the above-described forfeitable property, as a result of any act or omission of the defendant, cannot be located upon the exercise of due diligence; has been transferred, sold to or deposited with a third party; has been placed beyond the jurisdiction of the court; 33
Case 3:07-cr-00148-RRB Document 366 Filed 12/17/2008 Page 34 of 34 has been substantially diminished in value; or has been commingled with other property which cannot be divided without difficulty, it is the intent of the United States, pursuant to 28 U.S.C. 2461(c incorporating 21 U.S.C. 853(p, to seek forfeiture of any other substitute property of said defendant up to the value of the forfeitable property described above. A TRUE BILL. s/ Grand Jury Foreperson GRAND JURY FOREPERSON s/ Kevin Feldis KEVIN FELDIS Assistant U.S. Attorney th 222 West 7 Ave., #9, Rm. 253 Anchorage, AK 99513-7567 Phone: 907-271-5071 Fax: 907-271-1500 Email: kevin.feldis@usdoj.gov s/ Karen L. Loeffler for NELSON P. COHEN United States Attorney th 222 West 7 Ave., #9, Rm. 253 Anchorage, AK 99513-7567 Phone: 907-271-5071 Fax: 907-271-1500 Email: nelson.cohen@usdoj.gov DATE: 12/16/08 34