United States Attorney David E. Nahmias
Northern District of Georgia
FOR IMMEDIATE RELEASE CONTACT: Patrick Crosby
01/26/06 (404)581-6016
http://www.usdoj.gov/usao/gan/
FAX (404)581-6160
22 INDICTED FOR MORTGAGE FRAUD
Charges Expand in Phillip Hill mortgage fraud scheme
Atlanta, GA - In a 181 count superseding indictment, 22 defendants have been charged by
a federal grand jury with conspiracy, bank loan fraud, mail fraud, wire fraud, and money laundering
relating to a mortgage fraud scheme that targeted the metro-Atlanta area house and condominium
market. Today’s indictment expands the scope of prior charges to include over 40 residential houses
and over 230 condominiums in the Atlanta area involved in the mortgage fraud scheme.
United States Attorney David E. Nahmias said, "The negative impact on our neighborhoods
of this multimillion dollar fraud scheme extends far beyond the financial loss to the victim lenders.
The Phillip Hill mortgage fraud scheme charged in this indictment is the most extensive this office
and federal investigative agencies have uncovered to date in the Atlanta area. This indictment is a
major step forward in this office’s commitment to expose and eradicate mortgage fraud schemes in
our community."
The 22 defendants charged in today’s superseding indictment are: MARCUS C.
ALCINDOR, a/k/a "Christopher Alcindor," 42, of St. Lucia; CHRISTOPHER BAKER, 40, of
Canada; CARL BEST, 42, of New York City; BARBARA BROWN, 32, of Mableton, Georgia;
WILLIAM CHAVIS, 43, of Stone Mountain, Georgia; CHERYL DENNY, 42, of St. Lucia; FRED
FARMER, 59, of Roswell, Georgia; MICHAEL FLAKE, 31, of Stone Mountain, Georgia;
WESLEY GOLDEN, 57, of Atlanta, Georgia; RILEY GRAHAM, a/k/a "Riley Williams," 39, of
Detroit, Michigan; PHILLIP E. HILL, 49, of Blounstown, Florida; CORTNEY JACKSON, 49, of
Detroit, Michigan; CHRISTINE LAUDERMILL, 44, of Gainesville, Georgia; RASHID
MUHAMMAD, 35, of Syracuse, New York; JAMES MOSS, a/k/a "Dr. James Moss," 49, of
Roswell, Georgia; JULIAN PEREZ, a/k/a "Tony Perez," 49, of Roswell, Georgia; ROBERT
POWERS, 45, of Cumming, Georgia; LESLIE RECTOR, 33, of Atlanta, Georgia; ANNETTE
SPEAR, 50, of Union City, Georgia; DAVID THOMAS, 46, of Baton Rouge, Louisiana; DEAN
THOMAS, 40, of Covington, Georgia; and DAVID VAN MERSBERGEN, 46, of Atlanta, Georgia.
In the initial indictment related to the scheme handed down by a federal grand jury in June
of 2005, 19 defendants were indicted on charges focusing on the “4001 Cascade” Subdivision, in
Fulton County. Since that time, three of the original defendants, JEREMY DERCOLA, 29, of
Douglasville, Georgia; WENDELL HIGGS, 42, of Suwanee, Georgia; and BRANT PETREE, 23,
of Marietta, Georgia have entered guilty pleas before District Court Judge Thomas Thrash based
upon their participation in the mortgage fraud scheme. They are scheduled for sentencing in May
of 2006. In addition, CHRISTOPHER HALCOMB, 44, a closing attorney from Cumming, Georgia,
and THEODORE TAGALAKIS, 34, of Alpharetta, Georgia and WAYNE JENKINS, 48, of Atlanta,
Georgia, both formally mortgage brokers in Atlanta, have each entered guilty pleas in three related
cases involving the same mortgage fraud scheme. They are also scheduled for sentencing in May
of 2006. ANDREW WOLF, 45, a closing attorney from Roswell, Georgia has also been charged
in a related case with participating in the mortgage fraud scheme. WOLF is expected to enter a
guilty plea before Judge Thrash on a date not yet set by the court.
The superseding indictment alleges that PHILLIP E. HILL was the owner and operator of
"We Build Atlanta, Inc.," "The Estate Firm, Inc.," "Estate Artistians of Georgia, Inc.," "Estates
Atlanta, Inc.," and other Georgia corporations and the HILL controlled the affairs of each
corporation. HILL held himself out to be a real estate developer, and either individually or through
one or more of the corporations he controlled, purchased and sold numerous residential properties
in the Atlanta area. HILL and co-conspirators allegedly participated in a scheme to bribe a loan
officer of Charter Bank and Trust and to obtain two lines of credit using false qualifying
information. The Charter loan officer, FREDERICK VARGAS, 37, of Boca Raton, Florida, has
entered a guilty plea in a related case and is presently scheduled for sentencing in March of 2006.
The indictment further alleges that when confronted by Charter Bank officials, HILL falsely claimed
that his interest in a loan owed by the Alcindor-Williams Group, LLC related to the sale of lots in
the 4001 Cascade subdivision would allow him to pay back the line of credit.
In the second part of the indictment, HILL and coconspirators are charged with participating
in a scheme to defraud Centrum Financial Services, Inc. related to a $1.3 million loan granted to
the Alcindor-Williams Group, LLC. That loan was to finance the Alcindor-Williams Group's
purchase of 27 undeveloped residential lots in the "4001 Cascade" subdivision from Estates Atlanta,
Inc. The principals of the Alcindor-Williams Group, LLC were defendants MARCUS C.
ALCINDOR, RILEY GRAHAM and a third unindicted co-conspirator. The indictment charges that
CHRISTOPHER BAKER, JAMES MOSS and JULIAN PEREZ also participated in the scheme to
defraud Centrum. The scheme included submitting false documents to Centrum during the loan
application process, including inflated appraisals, altered checks and false marketing plans, and
making false statements regarding the down payment and investment of the Alcindor-Williams
Group, LLC in the property.
The indictment also charges conspiracy, bank loan fraud, wire fraud, mail fraud and money
laundering related to mortgages obtained on the sale of approximately 50 homes and 230
condominiums, including the originally charged 13 homes in the 4001 Cascade subdivision. These
homes were all owned at one time by one of the PHILLIP HILL entities. Each home was sold at an
inflated price to a "straw borrower" who applied for a mortgage loan based upon the inflated price.
Such a fraudulent transaction is called a mortgage "flip." The straw borrowers who participated in
these mortgage flips were paid a kick-back out of the excess loan proceeds for the use of their name
and credit. The victim lenders granted the loans based upon numerous false representations and
documents regarding the credit qualifications of the straw borrowers as well as false representations
that the straw borrower had paid a down payment, would reside in the home, and would be
responsible for the loan payment. Some of the homes were "flipped" more than one time. The
indictment also charges that Atlanta Sky View Living Management, LLC, a Georgia company
operated by JEREMY DERCOLA and JULIAN PEREZ, participated in these secondary "flips."
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The indictment alleges that LESLIE RECTOR, who operated Financial Investment Resource
Management, was HILL’s primary assistant through the fraud scheme. The straw borrowers charged
in the indictment include DAVID VAN MERSBERGEN, a HILL business entity employee;
ANNETTE SPEAR; CHERYL DENNY; CARL BEST; and CORTNEY JACKSON. CHRISTINE
LAUDERMILL, RASHID MUHAMMAD, WILLIAM CHAVIS, DEAN THOMAS, and DAVID
THOMAS were also charged as recruiters of straw buyers for HILL. In addition, the indictment
charges former Georgia appraisers FRED FARMER, JULIAN PEREZ and BARBARA BROWN,
and mortgage brokers MICHAEL FLAKE, WES GOLDEN, JULIAN PEREZ, and ROBERT
POWERS based upon their participation in the scheme to defraud the victim lenders.
This case is being investigated by Special Agents of the IRS-Criminal Investigation.
Assistant United States Attorney Barbara E. Nelan is prosecuting the case.
Members of the public are reminded that the charge(s) contain only allegations. A defendant
is presumed innocent of the charges and it will be the government's burden to prove a defendant's
guilt beyond a reasonable doubt at trial.
For further information please contact David E. Nahmias (pronounced NAH-me-us), United
States Attorney or William L. McKinnon, Chief, Economic Crime and Cybercrime, through Patrick
Crosby, Public Affairs Officer, U.S. Attorney's Office, at (404) 581-6016. The Internet address for
the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is
http://www.usdoj.gov/usao/gan/.
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