Here is another example of a recent legal case involving a fraudulent real estate scheme committed by a real estate agent. I try to post case summaries in order to provide timely updates to real estate professionals on important issues.
On May 7, 2009, Alethia Grooms, a licensed real estate agent, was sentenced to 37 months of imprisonment for her involvement in a $48 million property tax refund fraud scheme orchestrated by former District of Columbia Office of Tax and Revenue (“OTR”) manager Harriette Walters.
Ms. Grooms plead guilty on August 13, 2008, to Possession of Stolen Property, Conspiracy to Commit Money Laundering, and Conspiracy to Make False Statement in Connection with FHA Loan. She was sentenced to 37 months in prison, required to pay $650,929.19 in restitution, serve three years of supervised release, perform 300 hours of community service, and pay a $300 special assessment.
According to her plea agreement, Ms. Grooms participated in the theft and laundering of over $600,000 from the District of Columbia government through a D.C. property tax refund fraud scheme. Ms. Walters used her position at OTR to create false property tax refund vouchers that produced millions of dollars of fraudulent refund checks. From June 1989 through August 2007, Ms. Grooms and two of her friends received 17 fraudulent D.C. property tax refund checks, totaling over $460,000. Ms. Grooms also laundered an additional $145,000 in stolen D.C. funds through one of her bank accounts.
Ms. Grooms used her graphics design skills to help cover up the D.C. property tax refund fraud scheme. In June 2007, officials at SunTrust Bank became suspicious when a co-conspirator tried to deposit a $410,000 fraudulent D.C. check at that bank. The co-conspirator asserted that the money came from the co-conspirator’s participation in a tax sale auction at OTR. Ms. Grooms attempted to help the co-conspirator provide documentation by scanning a D.C. Real Property Tax Sale form with writing on it onto her computer.
In 2006, Ms. Grooms conspired with two OTR employees to commit mortgage fraud. Ms. Grooms was their real estate agent and assisted them with obtaining Federal Housing Administration (FHA) loans. In their loan applications, these individuals falsely claimed to have second jobs and inflated their bank accounts by $20,000. Using her graphics design skills, Ms. Grooms created bogus pay stubs and W-2 forms and forged bank statements.
In addition to her share of the proceeds of the fraudulent D.C. property tax refund checks, Ms. Grooms received cash, checks, and other items of value from Ms. Walters. In particular, Ms. Grooms received personal checks from Walters in the total amount of $42,300.
All eleven defendants in this conspiracy have plead guilty, and all but two have been sentenced. Ms. Walters, the ringleader of the conspiracy, is scheduled to be sentenced on June 16, 2009. She will likely receive a harsher sentence than did Ms. Groom.
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