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California Woman Pleads Guilty to
Mortgage Fraud Conspiracy
$12.6 Million Scheme Involved New, Upscale
Homes in Lee’s Summit, Raymore
KANSAS CITY, MO—Matt J. Whitworth, Acting United States Attorney for the
Western District of Missouri, announced that a Santa Fe Springs, Calif., woman
pleaded guilty in federal court today to her role in a $12.6 million mortgage
fraud conspiracy that involved 25 upscale residential properties in Lee’s
Summit, Mo., and Raymore, Mo.
Cheryl Ann Romero, 51, of Santa Fe Springs, pleaded guilty before U.S. Chief
District Judge Fernando J. Gaitan this morning to the charge contained in an
Oct. 29, 2008, federal indictment.
Romero is among 10 defendants who have pleaded guilty to the scheme to buy
and sell new homes—all of which were built by Jerry R. Emerick, 39, of
Raymore—in the Raintree and Belmont Farms subdivisions in Lee’s Summit and the
Eagle Glen subdivision in Raymore. Buyers purchased the homes at inflated
prices, obtaining mortgage loans for more than the actual sale price by
providing false information to mortgage lenders, then kept the extra proceeds.
Buyers created shell companies for the purpose of receiving those kickbacks from
Emerick, with kickbacks of up to $125,000 on each house.
Emerick owned and operated Ty Construction and Residential Contracting, LLC,
which was engaged in the business of residential construction, primarily in
Lee’s Summit and Raymore. He pleaded guilty on April 9, 2009, to conspiracy to
commit mortgage fraud and wire fraud and to transfer funds obtained by fraud
across state lines.
In total during the course of the conspiracy from June 2005 to May 2007,
mortgage lenders approved loans for 25 homes totaling more than $12.6 million.
From that total, buyers received approximately $2.3 million without the lenders’
knowledge.
Romero purchased two Lee’s Summit properties from Emerick. In obtaining
mortgage loans to make the purchases, Romero made material misrepresentations in
the loan applications upon which the lenders relied and received money back
unbeknownst to the lenders.
Romero received a $519,900 loan to purchase the property at 4101 S.E. Canter
Drive, for which she received a $90,000 kickback. Romero also received a
$549,900 loan to purchase the property at 4513 Admiral Byrd Drive, for which she
again received a $90,000 kickback. Both payments were made from the loan
proceeds by the title company to Miracle Management, a company Romero set up for
that purpose.
Under federal statutes, Romero is subject to a sentence of up to five years
in federal prison without parole, plus a fine up to $250,000 and an order of
restitution. A sentencing hearing will be scheduled after the completion of a
presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Linda Parker
Marshall. It was investigated by the Federal Bureau of Investigation and
IRS-Criminal Investigation.
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