9 charged in Valley mortgage scheme

Staff report

CLEVELAND

Seven people are charged in a 49-count federal grand-jury indictment and two more are charged in a one-count information in a complex mortgage-fraud scheme involving 48 Mahoning Valley houses and more than $7.5 million in mortgage loans.

The indictment consists of one count of conspiracy to commit wire fraud and 48 counts of wire fraud, one for each house. Most of the houses involved are in Youngstown and Warren, and “the vast majority” went into foreclosure, the U.S. attorney said.

Seven victim companies sustained a combined loss of more than $2 million, the U.S. attorney added.

Indicted Tuesday were Romero Minor, 51, of Macon, Ga.; Timothy Corey, 49, of Youngstown; William Helbley, 57, of Poland; Wendell Kerr, 62, of Gautier, Miss.; Robert Lunsford, 54, of Hubbard; Damon Petrich, 39, of Boardman; and Michael Wagner, 54, of Canfield.

Charged with only the conspiracy count in a bill of information filed Monday are loan officers Roy R. Root, 46, of Warren and Dwayne Townsend, 42, of Youngstown.

During the conspiracy, which operated between July 2003 and January 2006, Root was with Keyrock Financial, and Townsend was with Gerspacher Mortgage, the U.S. attorney said. The conspiracy charge carries a maximum penalty of five years in prison and a $250,000 fine.

An information may be filed only when a defendant waives a grand-jury indictment. The filing by a prosecutor of a bill of information typically means the defendant is cooperating with authorities and agrees to be found guilty.

The state, and especially the Mahoning Valley, “have seen the disastrous impact mortgage fraud has on neighborhoods,” said Steven M. Dettelbach, U.S. attorney. “It destroys families and devastates entire blocks and communities, so attacking the problem from every direction is vital.”

Root and Townsend knowingly prepared and submitted mortgage-loan applications to various lenders containing false and fraudulent information in the names of several straw buyers to secure the mortgage loans, the information says.

“The object of the conspiracy was to defraud mortgage-lending companies by submitting mortgage-loan applications with false and fraudulent information about the straw buyers” to induce the mortgage companies to finance the purchase of the houses “by approving the mortgage loans at inflated appraised values” based on the fraudulent applications, the information says.

The case was investigated by the Youngstown Mortgage Fraud Task Force, which consists of the Youngstown FBI office, the Mahoning County Sheriff’s Department, the U.S. Department of Housing and Urban Development, the Ohio Department of Commerce and the Ohio Bureau of Criminal Identification and Investigation.

The case is assigned to U.S. District Judge Patricia Gaughan.