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District Man Sentenced to 40 Months in Prison in Mortgage Fraud Scheme

Friday, January 27, 2012
The defendant admitted to obtaining $2.4 million as a result of the fraud.

Akinola George, 42, of Washington, DC, was sentenced today to a prison term of 40 months after earlier pleading guilty to conspiracy to commit bank fraud and mail fraud for his role in a mortgage fraud scheme.

The sentencing was announced by U.S. Attorney Ronald C. Machen Jr.; Daniel S. Cortez, Inspector in Charge, Washington Division, US Postal Inspection Service; William P. White, Commissioner of the District of Columbia Department of Insurance, Securities and Banking; James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office, and Kenneth R. Taylor, Special Agent in Charge of the Office of Inspector General of the US Department of Housing and Urban Development.

George pled guilty in September 2011 in the US District Court for the District of Columbia and was sentenced by the Honorable Reggie B. Walton. Judge Walton ordered that George begin serving his prison time immediately. He noted that George’s “elaborate scheme” caused a significant amount of loss. As part of his plea agreement, George agreed to forfeiture of $2.4 million. He also must pay restitution in the amount of $2,021,346 to victims of his crime.

According to a statement of offense, signed by the defendant, from October 2004 to April 2008, George, with the assistance of others, defrauded banks and other lenders of money through false statements and misrepresentations. George used about 22 sales of residential real estate properties (all but two sales were for property in the District of Columbia) to fraudulently obtain mortgage loans. Loan documents in support of these mortgages listed false employers and false salaries for the buyers, exaggerated the assets available to the buyers to pay back the loans and make a cash contribution, and incorrectly listed the buyers' intent to occupy the houses.

During the settlement of the sales transactions, thousands of lender dollars were siphoned off through fake “renovation” invoices and misrepresentations on the settlement documents. Through this process, George fraudulently obtained approximately $2.4 million, even though he was not the seller on any of the properties. George used some of this money to pay for the assistance of others in the conspiracy, to share with other co-conspirators, and to pay for bogus “down payments” for the buyers, as well as other items. For many properties in the District of Columbia, a co-conspirator acting as the settlement agent submitted the signed Deed or Deed of Trust to the District of Columbia’s Recorder of Deeds, with the instructions that after recordation, the documents be mailed back to the title company, which did occur. After closing, the co-conspirators failed to continue to pay the mortgages on some of the properties. The lenders were forced to foreclose and resell the properties at a loss of more than $2 million.

In announcing the sentence, US Attorney Machen, Inspector in Charge Cortez, Commissioner White, Assistant Director McJunkin, and Special Agent in Charge Taylor commended the efforts of those who worked on the case from the Postal Inspection Service, the District of Columbia Department of Insurance, Securities and Banking, the FBI’s Washington Field Office, the Office of Inspector General of the Department of Housing and Urban Development, and the Metropolitan Police Department. They also praised those who worked on the case from the US Attorney’s Office, including Forensic Accountant Crystal Boodoo, Paralegal Specialist Sarah Reis, Assistant US Attorney Diane Lucas, who assisted in forfeiture, and Assistant US Attorney Virginia Cheatham, who is prosecuting the case.