Three Peoria, Illinois women have been sentenced for their involvement in a mortgage loan scam where they defrauded a bank of $1.7 million in a classic flip transaction scheme. Another defendant, an appraiser, was sentenced earlier this month in the case.
The story begins in 1996, according to an account of the case from the U.S. Attorney’s office. Laurie E. Hensley, 37, worked as a loan officer for First Financial Bank — which later changed its name to Associated Bank. Hensley, who was later promoted to branch manager at the bank, would assist buyers with mortgage loan applications.
Hensley, along with two other defendants — Lorri L. Brown, 43, and Patricia J. Truckenbrod, 47 — would typically purchase a property and resell it shortly thereafter to would-be renters at much higher prices.
Prospective renters of the properties were told that they could actually buy the homes with no money down and a mortgage payment that was no more than the rent. While renters indicated they could not afford a home or had bad credit, Hensley used false documentation to secure approvals. Among the false documents were copies of checks to be used for down payment. The three defendants bought checks for the buyers, photocopied them for the loan file, then returned the funds to their own accounts.
The defendants reinvested proceeds from these transactions in more similar transactions.
First Financial Bank officials realized in December 1997 that a high percentage of loans originated by Hensley became delinquent shortly after closing. A bank committee later determined that the loan files were fraudulent.
Hensley left the bank in August 1998.
The three women pleaded guilty to charges in February of this year. They were sentenced earlier this month, with Hensley receiving a 46 month sentence and restitution ordered at more than $500,000.
The Journal Star reported that all three defendants sobbed at the sentencing, with Hensley sobbing loudest and begging for mercy.
Sharon Paul, from the U.S. Attorney’s office in Springfield, Illinois, told MortgageDaily.com that another defendant, Donald L. Williams, was also sentenced earlier this month to 46 months in prison and more than $300,000 in restitution. Williams was the appraiser in the transactions.
