Guilty plea in $10M subprime mortgage fraud

June 17, 2010 02:30PM

The ringleader of a group of four individuals accused of defrauding lenders out of more than $10 million using more than two dozen subprime loans on properties in New York City and the vicinity pleaded guilty today in Manhattan Federal Court, authorities said.

Sharmon Howell, also known as Sharmon Wade, admitted that in 2006 and 2007 he took part in a scheme using straw buyers who gave false information about their income, assets and intent to live in the homes, to lenders in order to obtain millions of dollars in loans, the office of the United States attorney in Manhattan said.

Once the loans were made, Howell, 36, and the three other co-conspirators allegedly split the proceeds of the loans realized from spreads between the purchase price of the property and the often higher mortgage value.

In most instances, neither the straw buyers nor the defendants maintained mortgage payments, resulting in the foreclosure of many of the homes, authorities said.

Howell, of Queens, pleaded guilty to a single count of conspiracy to commit bank and wire fraud and faces up to 30 years in prison and a $1 million fine or two times the total amount gained from the fraud, authorities said.

Two other defendants, David Moore and June Persaud, both of Brooklyn, pleaded guilty but have not yet been sentenced. Oscar Ancrum of Manhattan, the fourth person accused, has not been arrested.

Howell pleaded guilty in Manhattan state court in May to charges that he defrauded investors of more than $1 million. TRD