Credit fraud case could be the first of its kind
Credit fraud allowed a California woman and Florida man to obtain millions of dollars in mortgage loans.
KANSAS CITY, Mo. — Federal prosecutors have charged a California woman and Florida man with helping at least three people build false credit histories that allowed them to obtain millions of dollars in mortgage loans.
"Credit history fraud poses a significant threat to our financial institutions and undermines our economy," Phillips said at a news conference. "Using a false Social Security card or in any way misrepresenting your financial history is a crime. It is a significant crime with significant penalties."
Karen Washam-Hawkins, 48, of Carson, Calif., and Gerald William Bartlett, 38, of Tampa, Fla., are charged with conspiracy to defraud the U.S. government and interstate transportation of funds obtained through fraud. Washam-Hawkins also is facing two wire fraud counts.
Neither Washam-Hawkins nor Bartlett has been taken into custody, but Phillips said arrangements would be made to allow them to surrender.
Don Ledford, a spokesman for Phillips, said it doesn't appear the two have attorneys, nor is he sure they're even aware of the indictment against them.
According to the indictment, Washam-Hawkins sold false Social Security numbers to Shade Jerome Howard, of Anaheim, Calif., in late 2004 or early 2005. Howard bought numbers for himself and helped at least two Kansas City-area men, Daryle Edwards of Overland Park, Kan., and Ron Brown, of Gladstone, Mo., obtain others.
Prosecutors said Bartlett increased the credit scores attached to the Social Security numbers by using his companies, South Florida Management Group and Consumer Financial Group, to report false account and payment information to credit bureaus.
Howard, Edwards and Brown used the false numbers and credit information to purchase six new homes worth more than $2.7 million, prosecutors said.
All three were sentenced earlier this year for their roles in a $12.6 million mortgage scheme in the Kansas City suburb of Lee's Summit. They were among 18 people who have pleaded guilty to participating in the scheme, which involved 25 upscale homes.
"Local FBI agents dug deeper into a mortgage fraud scheme that resulted in a multimillion dollar loss in the Lee's Summit area," Phillips said. "By digging deeper into that mortgage fraud scheme, investigators uncovered a second scheme, a credit history fraud scheme that was operating in the shadows of the mortgage fraud scheme."
Neither Washam-Hawkins nor Bartlett has been taken into custody, but Phillips said arrangements are being made for them to surrender. A telephone message left for Washam-Hawkins on Wednesday was not immediately returned, and a phone number for Bartlett could not be located.
The Associated Press reported earlier this week that federal agents have discovered a proliferation of companies that sell stolen Social Security numbers disguised as credit repair tools called credit profile numbers, also known as credit privacy numbers, or CPNs.
Investigators say children are prime targets because most won't use their Social Security numbers to get credit for several years, which means fraudsters can use their numbers for long periods of time undetected.