members of Reverse Mortgage Fraud Ring plead
profited from FHA-Insured "Reverse" Loans
intended to benefit Seniors
ATLANTA, April 8 /PRNewswire-USNewswire/ --
Torrey Hull, 38, and Jonathan Alfred Kimpson, 27, both of Lithonia, Ga., pleaded
guilty today in federal district court to a
conspiracy to defraud reverse mortgage
lenders and the Federal Housing
Administration (FHA) insurer of the loans.
Hull pleaded guilty to an additional bank
fraud charge involving mortgage fraud, and
Kimpson pleaded to an additional identity
U.S. Attorney Sally Quillian Yates said,
"These defendants plead to profiting from
the corruption of a FHA-insured program
designed to assist seniors with either cash
for equity in their home or with funds
toward the purchase of a home.
defendants changed real estate records and
used other fake documents to place seniors
in houses worth only a fraction of the
amounts represented, and divert loan
proceeds to themselves.
these prosecutions, we have taken a
significant step to stop this type of
Inspector General Kenneth Donahue, U.S.
Department of Housing and Urban Development
(HUD) said, "HUD's Home Equity Conversion
Mortgage Program was created to help senior
citizens find greater financial security
through FHA-insured reverse mortgage loans.
HUD Office of Inspector General will
aggressively investigate those who would
prey on America's senior citizens through
reverse mortgage fraud, and encourages
anyone having knowledge of such schemes to
contact our HUD Hotline at 1-800-347-3735."
According to U.S. Attorney Yates, the
charges and other information presented in
court: Reverse mortgages were designed to
assist with the financial security of
seniors, ages 62 or older.
are two types of reverse mortgages. In a "refi-reverse,"
the senior homeowner receives money from the
lender for a portion of the equity in the
home they own.
In a "purchase money reverse," the senior
receives money from the lender toward the
purchase of a new home.
Under both types of reverse mortgages, the
senior does not have to repay the lender for
as long as the senior lives in the home.
However, refi-reverse mortgages fund only a
percentage of the property value, requiring
significant equity to remain in the
property, and purchase money reverse
mortgages require a significant down payment
from the senior borrowers to establish
equity in the property.
The equity must remain in the home to cover
loan principal, interest, insurance and
servicing costs upon FHA sale of the
property when no longer occupied by the
Hull and Kimpson took advantage of the
system by faking the required seniors' down
payments needed to qualify for the
FHA-insured purchase money reverses.
The defendants did this through bogus "gift"
letters from "relatives" in amounts between
$50,000 and $105,000.
They also used fake "HUD-1" Settlement
Statements purporting to document the sale
of the senior's non-existent assets.
down payments were actually supplied by the
defendants, not the senior citizens, to be
returned to the defendants upon the reverse
loan closings, along with profits
substantially in excess of the true sales
prices of the properties.
The return of funds to the defendants were
disguised as either seller proceeds or lien
payoffs. All such fraudulently obtained
reverse mortgages included inflated
Kimpson's plea to aggravated identity theft
relates to his use of the stolen identity of
realtors and their password to falsify
Georgia Multiple Listing Service (MLS)
records to create fake property listings and
sales at inflated amounts in support many of
the fraudulent appraisals.
Hull also committed refi-reverse fraud by
transferring properties into seniors' names
to obtain refi-reverse mortgages at
fraudulently inflated amounts.
He thereby avoided the down payment
requirement for purchase money reverses, and
was able to divert loan proceeds to his
shell companies, disguised as lien payoffs.
Hull was charged by a criminal information
on Feb. 25, 2010. Hull could receive a
maximum sentence of up to 30 years in prison
and a fine of up to $1,000,000 on each of
the conspiracy and bank fraud counts.
Kimpson was indicted on Feb. 24, 2010.
Kimpson could receive a maximum sentence of
up to 30 years in prison and a fine of up to
$1,000,000 on the conspiracy count, as well
as a mandatory consecutive sentence of 2
years in prison and a fine of up to $250,000
on the aggravated identity theft charge.
In determining the actual sentence upon any
convictions in these cases, the court will
consider the U.S. Sentencing Guidelines,
which are not binding but provide
appropriate sentencing ranges for most
Sentencings for both Hull and Kimpson are
scheduled for July 16, 2010, beginning at 2
p.m., before U.S. District Judge Julie E.
These mortgage fraud cases are prosecuted
federally as part of President Barack
Obama's Financial Fraud Enforcement Task
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
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
These cases are being investigated by
Special Agents of the HUD-Office of
Inspector General and the Federal Bureau of
in this case is being provided by the U.S.
Department of Treasury Financial Crimes
Enforcement Network (FINCEN) and the Georgia
Multiple Listing Service.
Assistant U.S. Attorney Gale McKenzie is
prosecuting the cases.
For further information please contact Sally
Q. Yates, U.S. Attorney, or Charysse L.
Alexander, Executive Assistant United States
Attorney, through Patrick Crosby, Public
Affairs Officer, U.S. Attorney's Office, at
(404) 581-6016. The Internet address for the
home page for the U.S. Attorney's Office for
the Northern District of Georgia is