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Real estate family sentenced for fraud

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During what seemed to be a golden age for property values and home sales, perhaps it is no surprise there were those who found ways to take advantage of eager lenders.

As the real estate bubble grew, investigators uncovered plots designed to make money on the backs of lenders, including one crafted by the head of a Monett family. Charles Walker admitted to leading a nearly $11 million mortgage fraud scheme and was sentenced, along with his wife and son, Feb. 6 in federal court.

In July 2006, investigators from the Internal Revenue Service, U.S. Secret Service, Missouri highway and water patrols, and Springfield Police Department executed a federal search warrant at the office of Charles E. Walker Realty Inc., 3662 S. Glenstone Ave., according to SBJ archives.

This month, Charles Walker, 58, his wife Linda Walker, 59, and their son Lee Walker, 36, were sentenced to prison in separate appearances before U.S. District Judge Ortrie Smith. Charles Walker, who admitted he organized the mortgage fraud scheme that generated $4.3 million in kickbacks for the 17 participants, was ordered to immediately begin serving a 10-year sentence without the possibility of parole. Linda Walker was sentenced to one year and one day, while Lee Walker received a 30-month sentence. Both were found to be jointly and severally liable with Charles Walker for the $4.3 million in restitution.  

Linda and Lee Walker are scheduled to begin serving their sentences on April 2. The Walkers could not be reached for comment by press time.

According to the 52-count federal indictment, the conspirators defrauded various lenders by artificially inflating the sales prices of homes they purchased through Springfield-based Walker Realty and submitting false loan applications. The applications typically included inflated monthly income figures and incorrect listings of assets and liabilities for the borrowers, as well as inflated sales prices for the homes. All of the loan applications failed to acknowledge that a portion of the loan proceeds would be returned after closing to the borrower and others – under the guise of remodeling or repair costs, or for the borrower to apply toward mortgage payments.

The scheme involved mortgage brokers, appraisers and investors who sold and resold homes to other conspirators for financial gain. Court records show Charles and Linda Walker facilitated 26 residential real estate transactions conducted by themselves or others in Greene and Christian counties. On occasions, Charles Walker provided loans for down payments for other conspirators. In total, Lee Walker was responsible for more than $3 million in loan proceeds being transmitted through seven home purchases.

Co-defendants in the scheme were Walker Realty brokers Linda Hanks, Frankie Powell, Christopher Forrester, Laura Greer and Tammy Fedel. The five employees were also private investors who bought and re-sold properties through Walker Realty. Vincent Cantrell of Cantrell Appraisals LLC and Charles Pursley, who served as appraisers for Walker Realty, also were named as co-defendants. Other co-defendants, Steve Casarez Jr., Juan Johnson and William Wagoner, were mortgage brokers and private investors in the scheme, while Robert Barnica, Jess Cypret, James Powell and Eddie Rohrs were identified in the indictment as investors.

According Beth Phillips, the U.S. attorney for Missouri’s Western District, all 17 defendants have pleaded guilty and been sentenced for their participation in the mortgage fraud scheme.

The Walkers were not the only family involved. According to court records, Frankie Powell was the brother of investor James Powell and broker Linda Hanks. And Laura Greer was the daughter of James Powell.

According to the restitution order, 16 lending institutions suffered losses as part of the fraud including Bank of America, Wells Fargo and Washington Mutual. Bank of America suffered the greatest loss, at $1.49 million, and no locally held institutions are listed.

Phillips said the Walker case is among numerous cases of fraudsters who took advantage of lenders during the real estate heyday but have since been prosecuted by her office.

“These defendants took advantage of that environment by improperly inflating the value of homes and providing false appraisals,” Phillips said.

She declined to say how investigators were tipped off about the scheme saying that such disclosure could hinder efforts to continue to catch lawbreakers.[[In-content Ad]]

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