United States Attorney
District of Columbia
Friday, March 2, 2012
Former Real Estate Appraiser Sentenced in Washington, D.C., to 65 Months in Prison for Mortgage Fraud
WASHINGTON – Renaldo D. Gillis, 44, of Lithon ia, Ga., a licensed real estate appraiser, was sentenced today to 65 months in prison and ordered to pay restitution and forfeiture for leading a mortgage fraud scheme that cost lenders more than $2.3 million.
The sentencing in the U.S. District Court for the District of Columbia was announced by U.S. Attorney Ronald C. Machen Jr.; Daniel S. Cortez, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service; Kenneth R. Taylor Jr., Special Agent in Charge, Office of the Inspector General (OIG) of the U.S. Department of Housing and Urban Development (HUD), and William P. White, Commissioner of the District of Columbia Department of Insurance, Securities and Banking.
Gillis pleaded guilty in May 2011 to one count of conspiracy to commit bank, mail and wire fraud and one count of bank fraud. He was sentenced by the Honorable Rosemary M. Collyer. The judge ordered Gillis to pay $1,890,370 in restitution and entered a forfeiture order against him for $1,091,287. Upon completion of his prison term, Gillis will be placed on three years of supervised release.
According to the government’s evidence, from at least September 2003 to November 2009, Gillis, a purported real estate investor, joined with other co-conspirators to target Washington-area homes for quick resales, called “flips,” at fraudulently inflated prices. Gillis, who owned, operated and controlled at least two companies – Market Watch LLC and Investment 2000 Corporation – purchased and sold numerous residential properties, recruiting his friends and family members to serve as “straw buyers” in the scheme. These straw buyers agreed to have the properties placed in their names, but did not have to pay any down payments or the mortgages.
Gillis and the others obtained excessive mortgage loans on the properties through fraudulent loan applications, false appraisals and fraudulent settlements. These sales generated large cash proceeds, which Gillis and the other co-conspirators shared among themselves.
The loans fraudulently procured by Gillis and others from mortgage lenders exceeded $13 million. At least 11 properties fell into foreclosure, with a loss to lenders of more than $2.3 million. The mortgage fraud scheme netted Gillis and others more than $1 million in profits.
A co-defendant, Afolasade B. Orekoya, 41, of Washington, was sentenced in November 2011 to nine months in prison after earlier pleading guilty to charges of conspiracy and bank fraud. In addition to the prison term, Orekoya must pay $2,305,572 in restitution, serve five years of supervised release and forfeit $1,091,287 in a money judgment.
According to the government’s evidence, Orekoya was a licensed real estate agent and worked as an independent loan processor for various mortgage brokers, including Century Finance Funding LLC and BancStar on Capitol Hill LLC.
This case was pursued as part of Operation Stolen Dreams, a nationwide sweep that targeted mortgage fraudsters in the largest collective enforcement ever launched to confront mortgage fraud. The operation was organized by the Mortgage Fraud Working Group of President Obama’s interagency Financial Fraud Enforcement Task Force.
This prosecution is also part of President Barack Obama's Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit www.StopFraud.gov.
In announcing the sentence, U.S. Attorney Machen, Inspector in Charge Cortez, Special Agent in Charge Taylor and Commissioner White commended the work of those who investigated the matter, including Special Agents from the U.S. Postal Inspection Service and HUD-OIG, as well as the investigators from the District of Columbia’s Department of Insurance, Securities and Banking.
They also cited the efforts of those who worked on the case from the U.S. Attorney’s Office for the District of Columbia, including Paralegal Specialists Diane Hayes and Krishawn Graham; Assistant U.S. Attorney John Borchert, who investigated the case; and Assistant U.S. Attorney Diane Lucas of the U.S. Attorney’s Office for the District of Columbia’s Asset Forfeiture and Money Laundering Section. Finally, they acknowledged the work of Assistant U.S. Attorney Lionel Andre, who is prosecuting the case.