ALEXANDRIA, La. – United States Attorney Stephanie A. Finley announced that a federal jury found a couple who owned an Alexandria real estate company, and an attorney guilty last week in a scheme to fraudulently obtain more than $2 million in loans.
Deion A. Duruisseau, 47, and Lashawn A. Duruisseau, 41, both of Alexandria, and attorney Harold L. Lee, 55, of Pineville, La., were found guilty Thursday of one count of conspiracy to commit bank and wire fraud, and two counts of bank fraud. The eight-day trial started May 31st and ended June 9th, with the jury deliberating for four hours. United States District Judge Dee D. Drell presided over the trial.
According to the testimony and evidence presented, between June 2004 and October 2009, the defendants conspired to provide fraudulent information in order to finance more than 30 properties with mortgage loans totaling $2,119,000. Many of the properties went into foreclosure and caused the lenders to suffer losses. Some of the buyers would later declare bankruptcy and attempt to discharge the debt owed to the lenders.
The Duruisseaus’ company, Billionaire Properties, was used to further the scheme. Deion and Lashawn Duruisseau perpetrated the scheme by recruiting buyers from their church. The evidence showed that Deion Duruisseau would negotiate an initial contract with the seller of a rental property. Deion Duruisseau would negotiate a price and other conditions of sale for the investment property. Using the same property’s address but a recruited buyer’s information, he would then create a second contract. Deion Duruisseau would also increase the sale’s price of the property and submit the second contract to the loan company to initiate the mortgage loan process.
This allowed him to pay the current owner of the property at the previously agreed upon price in the first contract, and then keep the difference of the increased amount negotiated with the lender. The seller of the property and the mortgage loan company never knew the second contract existed.
After the buyers were recruited, the Duruisseaus counseled and advised them on what false information to include on the mortgage applications. Examples of false or withheld information included false monthly incomes, fictitious assets and down payment omissions. As a result, loan companies were led to believe the buyers had sufficient assets and the capabilities to furnish the down payments for the purchase of the various investment properties.
Harold Lee, who operated as the closing attorney, also used his company, Alexandria Title, as the settlement agent in the scheme to defraud. Lee created trust accounts and deposited his own funds into that account to facilitate the misrepresentation to the lender that the recruited buyers had sufficient funds and assets qualifying them for the loans on the investment property. Based on false information in loan applications and related documents, the lenders approved the loans.
Once approved, the lenders issued closing instructions and an approved HUD-1 settlement statement to Lee as the lending agent. However, contrary to the lenders’ closing instruction and the approved HUD-1, Lee used the lenders’ funds for the personal financial benefit of the Durusisseaus and himself. Lee failed to disclose to the lenders that he was a part owner of the properties that were sold having provided the funds to purchase the properties months earlier in the name of Deion Duruisseau. His failure to disclose to the lender his financial relationship with the Duruisseaus as a silent investor was a material omission.
In addition, Lee did not collect the down payment from the borrowers. Instead, this money came from the lenders’ own funds. Lee also did not distribute the money in the way HUD-1 required the money to be distributed. Once the transaction was complete, he split the proceeds with the Duruisseaus.
The defendants face up to 30 years in prison and a $1 million fine for each conspiracy count and the bank fraud counts. They also face five years of supervised release and restitution. A sentencing date of September 8, 2016 was set.
The FBI conducted the investigation. Assistant U.S. Attorneys Cytheria D. Jernigan and Earl M. Campbell are prosecuting the case.