Three Guilty In Multi-State CU Loan Fraud

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BALTIMORE – A young woman, her brother and boyfriend pleaded guilty yesterday to stealing hundreds of thousands of dollars in fraudulent loan proceeds from as many as two dozen mid-Atlantic region credit unions.

Latesha Brown, 26, obtained access to credit union systems while working for at least three credit unions–Aberdeen Proving Ground FCU, Transit Employees FCU and Municipal Employees CU–and membership in almost 20 credit unions all by using phony identification, work records and Social Security numbers.

The scheme is believed to have siphoned more than $500,000 in fraudulent loans, mostly auto or signature loans, from the three credit unions where Brown worked, as well as HARCO FCU, Navy FCU, State Employees CU of Maryland, Citadel FCU, Freedom FCU, Freedom CU, Johns Hopkins FCU, Pennsylvania State Employees CU, Philadelphia FCU, Susquehanna Valley FCU, DEXSTA FCU, among others.

Latesha Brown facilitated or processed fraudulent loan applications for herself, her boyfriend Christopher Houston, 34, and brother Donald Brown, 31, by accepting false paperwork and stolen materials, including: forged birth certificates and pay stubs; false drivers’ licenses, employment letters, and vehicle invoices; misappropriated social security numbers; stolen notary stamp seals; and bank paraphernalia, such as proprietary ink stamps, according to federal prosecutors.

Brown also processed the loan applications in a deficient manner, intentionally failing to collect all of the necessary supporting paperwork for a loan, and assisted the co-conspirators in withdrawing their ill-gotten loan funds so as to avoid detection.

From March 26, 2007 through August 5, 2010, Latesha Brown, using either a false name and/or the stolen identification information of other individuals, applied for jobs at 29 credit unions and for membership in 19 credit unions, prosecutors said. In many instances, she also applied for loans in her own name and other names, using stolen identification information and forged documents.

The conspirators applied for their loans using false pretenses, including vehicle loans with false dealership invoices where no vehicles were to be purchased, or where the vehicle was already owned outright by Houston. Latesha Brown facilitated the false vehicle loans so that the conspirators received clear titles to their “financed” vehicles without liens being placed on the vehicles.

The absence of the liens meant the credit unions had no collateral when the conspirators defaulted on their loans, so the credit unions were prevented from seizing the vehicle or other assets after the individuals failed to make payments on the loan. Further, the use of the false social security numbers prevented the credit unions from tracking down the borrowers.

Brown established a cellphone line exclusively for “Marybeth Wright,” a fictitious former supervisor, which she, Houston, and other conspirators used to receive phone calls from credit union personnel and other prospective employers seeking to confirm their prior employment history. All of the individuals involved in the scheme, including Brown, Houston and Donald Brown, listed this number on their loan applications.

 

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