FRESNO, Calif. - Former Bakersfield realtor David Crisp and his wife Jennifer pleaded guilty to fraud relating to real estate and bank fraud Monday at the Federal Courthouse in Fresno.
David Crisp pleaded guilty to one count of conspiracy to commit mail fraud, wire fraud and bank fraud. Jennifer Crisp pleaded guilty to one count of mail fraud, and one count of wire fraud. The couple pleaded guilty to various charges relating to the Crisp & Cole real estate fraud case.
According to the plea agreements, Carl Cole, who pleaded guilty in November, and David Crisp, owned and operated real estate brokerage firm Crisp, Cole & Associates, also known as Crisp & Cole Real Estate (CCRE), and Tower Lending, an affiliated mortgage brokerage.
According to court documents, between January 2004 and September 2007, others at CCRE and Tower Lending carried out a conspiracy to defraud mortgage loan companies and federally insured financial institutions, in part by using straw purchasers to acquire properties at inflated prices with funds borrowed from lenders, often using 100 percent financing, based on false and fraudulent loan applications. The properties were nominally owned in the names of the straw buyers, but were controlled by the “The defendants falsely inflated real estate prices knowing that the foreclosures that followed would do harm to local builders, consumers, and lenders,” said U.S. Attorney Wagner. “The conduct of Crisp, Cole & Associates was emblematic of the recklessness and lawlessness in the mortgage industry in the mid-2000s that caused the financial crisis. Since that crisis hit, this office has charged more than 350 people with crimes related to mortgage fraud schemes, and our work is not yet done.”and held for the benefit of the conspirators and CCRE.
The conspirators frequently resold the properties from one straw buyer to another, each time at an inflated, higher price so that the conspirators and CCRE could extract the purported increased “equity” from the property for their benefit.
Ultimately, and in many cases after the properties were flipped several times through various straw purchasers, most of the properties were foreclosed upon after the defendants failed to make the mortgage payments when due. According to court documents, the conspiracy caused close to $30 million in losses to mortgage loan companies and other financial institutions.
David Crisp was charged with 56 counts of mail, wire, bank fraud and conspiracy to launder money. He could face a maximum sentence of 30 years in prison and $1 million fine.
Jennifer Crisp has been charged with 11 counts of mail, wire, bank fraud and conspiracy to launder money. She could face a maximum sentence of 20 years in prison and $250,000 fine.
The Crisps will be sentenced March 3.
The remaining co-defendant, Julie Dianne Farmer, 45, of Bakersfield, is currently scheduled for trial on February 4, 2014. The charges against her are only allegations and she is presumed innocent until and unless proven guilty beyond a reasonable doubt.