Couple involved in mortgage fraud sentenced to federal prison
SAN DIEGO (CNS) – A real estate investor and his wife, a Wells Fargo bank employee, were each sentenced to federal prison Monday for participating in a mortgage fraud conspiracy involving dozens of properties in Colorado and Hawaii.
Grant McCollough, the 38-year-old owner of Tycoon Investments, was sentenced to 10 months in custody. His 36-year-old wife, Marisa, was sentenced to four months in prison. U.S. District Judge Michael Anello also ordered the couple to pay $25,746 in restitution to the IRS.
The McColloughs pleaded guilty in September and admitted that as part of their conspiracy, they recruited investors to act as “straw” buyers in real estate transactions. The defendants then arranged for false information to be submitted to mortgage lenders in support of the straw buyers’ loan applications.
The McColloughs also fraudulently inflated the value of the homes and disguised the source of the down payments in order to skim funds from the fraudulent transfer of property among their co-conspirators. The defendants then hid their skimmed profits from the IRS, according to prosecutors.
Nearly all of the fraudulent mortgages were arranged by co-conspirator Donald Totten, a mortgage loan officer and broker operating from Rancho Santa Fe.
Totten, 58, was sentenced in October to 30 months in prison for his role in the scheme, which included mortgage fraud causing more than $20 million in losses to mortgage lenders, bankruptcy fraud and filing a false tax return that failed to report more than $3 million in taxable income.
Grant McCollough’s business partner, Jason Kent, pleaded guilty in July to helping McCollough, Marisa McCollough and others with carrying out the mortgage and “kickback” scheme. Kent’s case was transferred to Hawaii, where he is scheduled to be sentenced Feb. 26.
Prosecutors said that with Totten’s help, Marisa McCollough bought a $3.4 million oceanfront home in Lahaina on the Hawaiian island of Maui.
In order to qualify, she falsely claimed that she earned $90,000 per month, had close to $700,000 in savings, and made a down payment of $630,000. The McColloughs lived in the home for several years, but never made the mortgage payments they owed, according to prosecutors.
