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DALLAS BUSINESSMAN SENTENCED TO NEARLY 22 YEARS IN FEDERAL PRISON FOR MORTGAGE FRAUD AND INVESTOR FRAUDDALLAS—Dallas businessman Charles Cooper Burgess, 52, was sentenced today by U.S. District Judge Barbara M.G. Lynn to 262 months (nearly 22 years) in prison and ordered to pay more than $3 million in restitution, announced U.S. Attorney Richard B. Roper of the Northern District of Texas. Burgess pled guilty in January 2006 to his involvement in two fraudulent schemes, one involving mortgage fraud and one involving defrauding individuals who invested in golf course property in Arkansas. In November and December 2006, Burgess testified against two co-defendants involved in the mortgage fraud case, Mark Manners and Andrew Siebert. At the conclusion of that trial, both Manners and Siebert were convicted of their role in the mortgage fraud scheme. At today’s sentencing hearing, victims of Burgess’ fraudulent schemes, who lost a total of $355,000, made victim impact statements to Judge Lynn. These victims became emotional as they told Judge Lynn that Burgess’s frauds inflicted great financial and emotional harm on their lives and that Burgess’ fraud lessened their ability to trust people. They said they trusted Burgess and he betrayed their trust. Judge Lynn told Burgess that many victims wanted her to “throw the book at him,” and that is exactly what she intended to do. Judge Lynn told Burgess that he lied during the Siebert’s and Manners’ trial and had no credibility with the Court. Judge Lynn called Burgess a “slick talker, liar, con and cheat.” Judge Lynn said Burgess’ fraudulent conduct was horrible in that he took advantage of people who trusted him and she went on to say that she sees many dangerous people, such as drug dealers, and that Burgess is in the “top five” of the worst defendants she has sentenced. Relating to the mortgage fraud scheme, Burgess admitted that he recruited 20 straw buyers with good credit but limited funds to sign loan and closing documents to purchase homes. As part of a signed “investor management agreement,” Burgess promised to provide the down payment at closing as well as make all mortgage payments. Burgess, and other convicted defendants, paid each of these straw buyers between $5000 and $10,000 “for the use of their credit” after the closing. When Burgess’s company ran out of funds for the needed down payments on these loans, Siebert agreed to release escrow funds to Burgess for the borrowers’ down payment. Burgess testified that Siebert would only agree to fraudulently release these escrow funds if Burgess agreed to pay Siebert $5000 from each closing as a “kickback payment.” Evidence at trial showed that defendant Siebert fraudulently released escrow funds on 20 separate loans. Siebert fraudulently released lender funds held in escrow to Manners prior to closing so that he could purchase a cashier’s check in the name of the straw buyer. When Siebert received the cashier’s check back from Manners, Siebert would complete the transaction, falsely certifying to the lender on the settlement statement that the down payment came from the borrower. On the settlement statement, Siebert also fraudulently accounted for disbursements to Burgess’ company by falsely listing the expense as a phony lien pay off, or as a “marketing and relocation fee” due to Burgess’ company. Eleven different lenders testified at trial that Siebert falsified the settlement statements to conceal his wrongful and fraudulent release of lender escrow funds. Each lender testified that the loan would never have been funded if the lender had known about the fraudulent use of lender escrow funds. From December 2002 through March 2004, Siebert fraudulently released a total of $1.6 million in lender escrow funds as part of the fraudulent scheme. As a result of Siebert submitting false certifications on settlement statements for each of these 20 loans, Siebert and Manners fraudulently induced the disbursement of loans totaling more than $7 million. Losses to lenders from foreclosures on the properties exceed $2 million. Burgess also pled guilty to a fraudulent scheme involving the sale of golf course property in Arkansas. The property used to defraud investors was the Mallard Point Golf Course owned by Jay Lucas. Burgess created and executed a scheme to defraud investors during January through December 2004. Directly and through salesmen, Burgess solicited individuals throughout the U.S. to invest in the Mallard Golf Development Project. As part of the scheme to defraud, Burgess prepared, and caused to be prepared, contracts to be signed by Project investors. In addition, Burgess made, or caused others to make, many false and fraudulent representations and promises to investors in the Project. Burgess falsely represented to investors that Select Homes owned, or had an option to own, lots on the Mallard Point Golf Course. Burgess persuaded investors to give him funds by deceiving them about the extent of his true ownership interests in the golf course. As part of his scheme, it was important that Burgess conceal from investors the truth that Burgess lacked any ownership interests in the golf course. Burgess also concealed that investment funds would be used for other purposes completely unrelated to the development of the golf course, namely, to pay Burgess’ personal debts and to pay off investors in connection with Burgess’ prior ventures. Mark Manners and Andrew Siebert have not yet been sentenced. U.S. Attorney Roper praised the investigative efforts of the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation. The case is being prosecuted by Special Assistant U.S. Attorney William M. Martin of the U.S. Department of Justice Anti-Trust Division and Assistant U.S. Attorney David Jarvis. |
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