Accountant Cecil Sylvester Chester Used Fraudulent Loan Documents In $1.4 Million Straw Deal Scheme

Accountant Cecil Sylvester Chester pleaded guilty today. Maryland prosecutors charged Chester for being involved in a fraudulent Baltimore straw deal. Chester used fraudulent loan documentation and straw purchasers on 7 properties. Lenders lost over $1.7 million to the scheme.

U.S. Attorney Rod J. Rosenstein told the media:

“Mortgage fraud perpetrators steal by inducing lenders to make loans that will never be repaid, and they harm neighborhoods when the inevitable foreclosures drive down property values,”

Chester worked as an accountant from an office located on New Hampshire Avenue in Hyattsville, Maryland. Co-conspirator Andreas Tamaris purchased, renovated, and then resold distressed row houses in Baltimore City.

Chester admitted in his guilty plea that from February 2008 to July 2009, he and his co-conspirators found buyers for Tamaris’ properties and for other property owners.

Chester The Financial Molester

He also persuaded inexperienced individuals to purchase Baltimore row houses owned by Tamaris or otherwise located by the conspirators.

Chester also advised these “purchasers” that they didn’t need to contribute funds for the down payment. He also advised them that they were not required to pay closing costs to buy these properties. Chester also advised that he would place tenants in the properties. As a result, the rental payments would cover the monthly mortgage payments after the transactions closed. Chester would then collect the rent and make the mortgage payments.

Chester and his co-conspirators set the purchase price for the properties to exceed their actual fair market value. Thus, they would be generating excess proceeds from the transactions from which they could profit.

Chester And His Co-Conspirators Gave False Information To Lenders

The conspirators in the straw deal scheme provided false information about the straw purchasers’ employment. They also gave false income and financial assets. In addition, they also gave fraudulent supporting documentation to the mortgage loan brokers. This was to enable the straw purchasers to qualify for home mortgage loans.

The conspirators falsely told lenders that the straw purchasers intended to reside in the property.

Tamaris and other individuals supplied the funds needed for the down payment and closing costs. In return, they were reimbursed from the loan proceeds at settlement.

As part of the straw deal scheme, Chester brought the purchasers into the straw deal scheme to the closing, and then caused the straw purchasers to falsely sign certifications in the closing documents affirming that they intended to use the properties as their primary residence and that no portion of the down payment and closing costs were borrowed. Following the settlement on each transaction in which they participated, Chester and the other conspirators received substantial payments drawn from the proceeds of the loan.

The Loans Went Into Default Immediately

Few, if any, payments were made towards the mortgages. All of the seven properties which Chester was involved in went into foreclosure, resulting in a loss of at least $1,482,207.

Chester faces a maximum sentence of 30 years in prison and a $250,000 fine for conspiring to commit wire and mail fraud, and for wire fraud. U.S. District Judge James K. Bredar has scheduled sentencing for March 23, 2016 at 2:00 p.m.

In a related proceeding involving two of the properties at issue in the instant case, co-conspirator Andreas E. Tamaris, age 44, of Bel Air, Maryland, previously pleaded guilty to one count of conspiracy to commit mail and wire fraud. Alexander Sivels, II, age 32, of Baltimore, previously pleaded guilty to wire fraud involving the fraudulent purchase of at least nine properties in Baltimore. Both Tamaris and Sivels are scheduled to be sentenced on September 27, 2016.

The Maryland Mortgage Fraud Task Force was established to unify the agencies that regulate and investigate mortgage fraud and promote the early detection, identification, prevention and prosecution of mortgage fraud schemes. This case, as well as other cases brought by members of the Task Force, demonstrates the commitment of law enforcement agencies to protect consumers from fraud and promote the integrity of the credit markets.