$3.7M Bank Fraud Sends 6 to Prison

Two women are headed to federal prison for their roles in a $3.7 million bank-fraud scheme that operated in 2006 and 2007.

U.S. District Judge William Duffey Jr. on Friday sentenced Shalena Sutherlin, 27, to two years, 10 months in prison and Catasha Browning, 36, to 14 months in prison.

After prison, Sutherlin will have five years’ probation and must do 75 hours of community service and pay $2,040,638.57 in restitution, and Browning faces three years’ probation with 60 hours of community service and must make $360,026.43 in restitution.

They are among six people sentenced Friday after pleading guilty to various charges in a scam run under the cover of Conyers-based Mastermind Events. The others are Otis Bernard Livingston, 44, of Gulfport, MS; Dionne Michelle Whitted, 37, of Castle Hayne, NC; Todd Ivery, 43, of Kennesaw; and Hung Quoc Nguyen, 30, of Buford.

“This fraud scheme, like so many, was based on greed and lies,” U.S. Attorney Sally Quillian Yates said in a news release. “The conspirators designed an insidious scam to target banks and local homeowners by using homes to secure loans, many times without the owners’ knowledge. We remain committed to safeguarding our financial institutions and their customers from such financial predators.”

The masterminds behind Mastermind were Livingston and Whitted, each of whom was sentenced to more than five years in prison, five years of supervised release and 150 hours of community service.

Whitted has to make restitution of $3.5 million, while Livingston has to repay almost $3 million.

Their scheme used “straw” borrowers, who used forged documents to present themselves to banks as homeowners. They usually acted without the true owners’ knowledge but managed to take out home equity lines of credit on the properties and funneled the proceeds to the leaders of the scam.

The loans usually went into default.

Yates explained that Mastermind Events was supposed to hold seminars to train people on trading in foreign currency exchanges, but instead the company focused on recruiting straw borrowers for bank fraud.

Sutherlin started as one of the straw borrowers but rose in the scheme to become president of Mastermind Events, recruiting straw borrowers and obtaining and using false financial documents to manage the scam.

She, Whitted and Livingston lied to straw borrowers, often convincing them that the proceeds of the trio’s foreign currency trades would repay the loans.

Browning, meanwhile, worked as a recruiter of straw borrowers, one of whom took out $380,000 in fraudulent loans.

Sutherlin and Whitted forged deeds to 18 homes and used the phony deeds to get 25 home equity lines of credit totaling more than $3.7 million from Wachovia, Bank of America and Washington Mutual.

They also bought forged tax returns, W-2s and pay stubs for the straw borrowers from Ivery.

Ivery was sentenced to four years and seven months in prison, five years of supervised release, 100 hours of community service, and $1,662,425.69 in restitution.

Sutherlin, Whitted and Livingston bribed Nguyen, a Bank of America senior personal banker, with cash, meals, a resort gift card and $8,000 in diamond rings to facilitate $1.4 million in bad loans.

Nguyen was sentenced to 30 months in prison, five years of supervised release, 150 hours of community service and $1,425,896.19 in restitution.

Nguyen pleaded guilty to receiving two diamond rings in return for getting the loan applications through the process.

Browning pleaded guilty to conspiracy to commit bank fraud and making false statements to federally insured banks.

Sutherlin, Livingston, Whitted and Ivery pleaded guilty to making false statements to federally insured banks.

The FBI and postal inspectors investigated the case, prosecuted by Assistant U.S. Attorneys David Leta and Nick Oldham.