Thursday, September 13, 2012

Mesa minister gets maximum sentence in fraud

A Mesa minister with a worldwide following will spend five years in federal prison for his part in a $5.5 million real-estate fraud that sent more than a dozen Valley homes into foreclosure.

A federal judge gave Clint Rogers the maximum prison sentence after he pleaded guilty to a single conspiracy charge and admitted using his ministry to launder millions of dollars generated from a home-flipping scheme.

Rogers is the head of Mesa-based Clint Rogers Ministries and conducts faith-healing events at churches throughout the United States, Africa, Asia and Europe.

The scheme, commonly referred to by authorities as a cash-back operation, plagued housing markets across the country during the height of the real-estate boom in the mid-2000s. Participants would lie on applications about home values, transfer title from one buyer to another while obtaining loans on the bloated price, and then pocket the difference.

Rogers admitted in January to artificially inflating the value of homes to milk the properties of $2.5 million in cash.

In court this week, Rogers argued that he should be eligible for probation and, at most, receive up to six months in prison. Rogers claimed that he never intended to walk away from the mortgages and that lenders suffered no actual losses.

In court filings, he said he made substantial down payments on the properties, of which "the total offsets exceed the amount of cash-back receipts, leaving an actual loss of zero."

Rogers and his wife, Angela Faith Rogers, were indicted by a federal grand jury in 2011, accused of fraudulently obtaining financing for 15 homes bought in 2006 and 2007.

Three co-conspirators in the fraud described Rogers as the mastermind. A former loan officer, escrow officer and straw buyer who pleaded guilty as part of a deal with federal authorities say they helped Rogers launder millions of dollars through his ministry.

Former Scottsdale loan officer Ernest Babbini told prosecutors that he submitted $5.5 million in phony mortgage-loan documents on 15 homes bought by Rogers and his wife.

Babbini, along with former Scottsdale escrow officer Drew Hull and Tempe homebuyer Shannon Kato, admitted using "double escrow" transactions and sales to bogus family trusts in order to inflate the values of the properties and to hide the identity of the purchaser from banks.

In court filings this month, Rogers denied orchestrating the scheme and called himself a "patsy."

Rogers, in court documents, said Kato encouraged him to get involved in what he believed was a legal real-estate investment. Rogers maintained that he sought legal advice to ensure it was not against the law.

Rogers said Babbini in some cases forged Rogers' signature on the loan documents without his knowledge. Rogers also maintained that Hull worked directly with Kato and Babbini to create the phony trusts and fraudulent loan documents.

In his plea agreement, he admitted to falsifying mortgage applications.

"One of the homes was on Copper Canyon Street in Mesa," Rogers said in court documents. "The loan application falsely stated my monthly income from Clint Rogers Ministry was $50,000 per month."

Rogers said he failed to list other real-estate transactions with which he was involved to ensure the banks approved the loan application. Settlement statements on the sale indicated Rogers would receive only $328 in cash from the sale. It concealed $452,288 paid to a ministry account he controlled, Rogers said in his plea.

Federal authorities said the case against the Rogerses is significant because of the number of homes involved and the amount of cash they generated. They said the defendants obtained anywhere from $113,000 to $530,000 in cash back from each home sale.

Babbini, Kato and Hull face sentencing in August. In exchange for guilty pleas, they are charged with one felony count of conspiracy. Each faces up to a $250,000 fine, five years in prison and five years' probation.

Angela Faith Rogers has also pleaded guilty to one count of conspiracy, and her sentencing was deferred until 2014.

The Rogerses' home purchases were detailed in a 2009 investigation by The Arizona Republic, which found that they bought 26 homes in less than two years and that nearly all of them went into foreclosure.

Property records show that Rogers and his wife bought homes that other sellers had purchased for thousands of dollars less just hours, days or weeks earlier.

Records show that 15 of the homes were sold to Rogers by Kato.

In his plea agreement, Kato said his role in the scheme was to act as the straw buyer, purchasing homes in his name, the name of his company or a fictitious family trust.

"So, it would appear that I had purchased the property from the seller, and then turned around and sold it at a higher price to Clint Rogers, Angela Rogers, another Rogers family member or a Rogers-controlled entity," Kato said in court documents.

Property records showed that Kato purchased a house on Merion Way in Paradise Valley on May 3, 2006, for $1.4 million. On the same day, Kato sold the home to Clint Rogers for more than $1.9 million. The house was foreclosed on and sold in April 2008 for $1.35 million.

Kato described how a settlement statement provided to the bank for one home sale showed that Rogers would receive $420 cash on the purchase without disclosing that $529,804 had gone to World Holdings LLC, a company Rogers controlled.

In her plea agreement, Hull said they submitted simultaneous loan applications to keep lenders from discovering multiple home purchases. She said applications listed false income and lies about occupancy so the loans would be granted.

by Robert Anglen - Jul. 26, 2012 The Republic |

Mesa minister gets maximum sentence in fraud

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