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May. 10, 2008
Copyright © Las Vegas Review-Journal

Three arrested, fourth sought in mortgage fraud

Many of 33 counts involved purported 'straw man' schemes

By JOHN G. EDWARDS
REVIEW-JOURNAL

Cindy Birkland



Jeffrey Tye Brown

A mortgage scam spawned during the Southern Nevada housing boom led to the arrest Thursday of three defendants and pursuit of a fourth, the attorney general's office said Friday.

Many of the 33 counts in the criminal complaint revolve around "straw man" schemes.


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    • In such schemes, the scammers urge someone -- the "straw man" -- to borrow money for a home purchase. The borrower doesn't make payments on the loan, but rather is told someone else will make the mortgage payments and then split profits with him when the home is sold later.

    Some of the defendants are charged with making false statements about the income and assets of home loan applicants in order to obtain home loans. The fraud was easier during the recent housing boom when many lenders required no documentation or limited documentation for home loan borrowers, said John Kelleher, assistant chief deputy attorney general and mortgage fraud task force chief.

    The arrests are the first made by the task force, which Attorney General Catherine Masto formed with other state agencies in January.

    The investigation started when a consumer told the attorney general's Bureau of Consumer Protection that he didn't get a promised refund of advance fees for foreclosure protection services, Kelleher said.

    The attorney general's criminal division obtained a search warrant for offices used by Jeffrey Tye Brown, who ran DB Financial Group.

    Brown was charged on March 27 with two counts of theft, two counts of deceptive trade practices and one count of forgery. The charges said that Brown charged one couple $999 in foreclosure prevention fees and a second couple $750, but Brown failed to provide any services.

    Brown has disappeared and is believed to be in the Philippines, Kelleher said.

    The new charges against Brown and three others include theft by misrepresentation, forgery, making false statements to obtain credit and racketeering.

    "They were putting anything it took on the documents, even blatant lies to get banks to approve the loans," Kelleher said.

    Attorney general's senior investigator Isabel Camp and investigator Shelley Neiman on Thursday arrested Cindy Birkland, 38, owner of Sapphire Mortgage; Bryan Sears, 46, a general contractor who did business as Searco; and Searco employee Claudia Koziol, 59.

    Sears and Koziol were in the Clark County Detention Center Friday in lieu of posting $50,000 in bond each. Birkland was in custody Friday, rather than posting $93,000 in bond.

    Defense attorney James Ruggeroli, who represents Birkland, said he cannot comment until he has studied the allegations.

    Sears attorney Richard Schonfeld said: "It's the beginning of the legal process, and we look forward to him being exonerated from these charges."

    Birkland and Brown are accused of straw man schemes. In one, they persuaded janitor Faye Smith to sell her condominium and turn over the $19,000 profit from the sale for a down payment on a house, according to the criminal filing. Instead, Brown and Birkland kept the money.

    Loan documents showed that Smith was earning $8,522 monthly while her income was $3,434. The loan application indicated Smith's assets included $99,000 in a bank account which belonged to Birkland, the complaint said..

    Sears and Koziol are accused of helping Birkland borrow $205,000 for office improvements, many of which weren't made to Sapphire's offices at 2637 W. Horizon Ridge Parkway, Suite 120. The complaint said that Birkland fabricated invoices from phony subcontractors.

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    unknown wrote on June 26, 2009 06:35 AM: Jeffrey Brown is in the Philippines indeed. He's running another business here in Dumaguete City. You should send feds here to get him. Check domybk.com coz I think thats's what he's doing now.


    Sandra wrote on May 24, 2009 07:15 PM: Have law enforcement ever heard of Granite Point Investments? They are located on Sahara. They used straw buyer's all the time. They would send straw buyer's to Titan Funding. Can't believe they never got arrested?


    alex wrote on March 20, 2009 11:47 AM: Cindy Birkland doesn't seem too worried about her impending trial and allegations. You should check out her facebook pictures - in one, she is seen riding on a mechanical bull with body parts hanging out. Not a care in the world...priceless.


    LVLV wrote on May 14, 2008 07:07 PM: Birkland is a perfect example of the morally and ethically bankrupt individuals in the mortgage broker business today. Hopefully she enjoyed her little weekend in the Clark County lock up, and here is to wishing her many nights behind bars.


    fluffy wrote on May 12, 2008 09:33 AM: "All loan officers/brokers/title and escrow professionals should all think about the transactions they have completed and ask themselves...Have I ever done anything that would be considered fraudulent"

    Isn't that what you should be asking yourself BEFORE you actually engage in the transaction?


    Looking in from the Outside wrote on May 12, 2008 09:02 AM: I agree with waiting for the facts. This entire arrest appeared to be "staged". The other interesting point is that the MLD commissioner (who has been rather quite since Scott Bice left office) also happened to be speaking at this event. I have never worked with Ms. Birkland and have no opinion of her but am waiting to see how this plays out. All loan officers/brokers/title and escrow professionals should all think about the transactions they have completed and ask themselves...Have I ever done anything that would be considered fraudulent (which would include signing a borrowers name to a disclosure or stating income so that a borrower would qualify). This new task force is going to make examples in the mortgage community....with the media right behind them.


    David Johann wrote on May 10, 2008 08:26 PM: Is that Jeffrey's in-custody mug shot?

    Does his facial expression appear consistent with a mug shot, or with someone who feels he's superior to the rest of us?


    Waiting for the facts... wrote on May 10, 2008 01:49 PM: The arrest looks staged media camera with in place and ready. While I am not condoning the ALLEGED allegations, having the media circus in place at while “undercover” agents place someone under arrest to glamorizing an arrest is purely in poor taste and seemed to be orchestrated very well with the “undercover” agents and the media there to surprise her. It seems as though quite a bit more information is necessary. I will wait to form my opinion when all the "facts" are in.


    Money Trees grow in Fantasy Land (USA) wrote on May 10, 2008 10:30 AM: Faye Smith should be also be arrested for being part of the Conspiracy (top to bottom.

    Sapphire Mortgage has the same or similar name as a local Strip Club. I wonder if Cindy Birkland was a strip Dancer?

    Mike L- good post, but what is a "mud shark"? hehe


    Notified Reader wrote on May 10, 2008 09:53 AM: I think the Rj and Las Vegas Now needs to do a little more research on what's going down. Has anyone thought it at all possible that Mr. Brown forged the signatures in Mrs. Birkland's name and has false witnesses testifying? Let's see what the government would do about that.


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