Local woman sentenced in fraudulent mortgage scheme
SAN DIEGO — A San Diego woman was sentenced to 41 months in federal prison Friday for operating a large-scale mortgage fraud scheme that caused more than $6 million in losses on various properties in San Diego and Orange counties.
According to court records and the defendant’s admissions, Kathryn Sylvester, 44, recruited “straw buyers” to submit falsified mortgage loan applications between June 2005 and May 2008.
The defendant also provided false documents to support the straw buyers’ misrepresentations regarding their income and employment, and added straw buyers to unrelated bank accounts so they could inflate the value of their assets on loan applications. Sylvester also helped convince lenders to fund loans for which Sylvester and the straw buyers would not otherwise qualify.
Although Sylvester promised some straw buyers that she would “flip” a number of the properties for a quick profit, she systematically drained equity from the properties for her own benefit, according to prosecutors.
Because of the defendant’s criminal acts, the conspirators were able to fraudulently obtain more than 80 loans resulting in more than $24 million in funded loans, losses that eventually went into default and ended up in the foreclosure of about 28 properties.