By FRANK LEWIS
PDT Staff Writer
Andrew Hill, 34, of Dublin, Ohio, was sentenced in U.S. District Court this week to 24 months in prison for obtaining more than $1.2 million in fraudulent mortgage loans involving investment properties in Portsmouth, then “flipping” the properties and selling them to unqualified buyers. Officials from three federal agencies announced the sentence.
Hill pleaded guilty in October 2011 to one count each of bank fraud and money laundering. According to a statement prepared by an FBI agent for the plea hearing, Hill, a mortgage broker, bought five investment properties in Portsmouth between 2005 and 2008, paying prices that were substantially higher than the seller’s asking prices. The asking prices were between $15,000 and $36,000. The statement said Hill paid between $75,000 and $85,000 for the homes using fraudulently obtained mortgage loans. Hill’s mortgage applications and closing statements included several false statements, the FBI said, including statements that he did not intend to receive cash generated by the mortgage loans. Hill would deposit the excess funds into an account he controlled in the name of a fictitious company he created, Ohio-Lendco.
On April 27, 2006, according to testimony, Hill entered a contract to purchase the property at 1504 Summit St. for $85,000. The sellers had previously listed the property for sale with a price of about $20,000. Hill obtained a loan to purchase the property from Sutton Bank. On Sept. 14, 2006, Hill purchased the property using a mortgage loan from that bank. At the closing, Hill signed a HUD-1 Settlement Statement claiming he was providing $18,709.07 to purchase the property and that $64,000 was to be paid to Ohio-Lendco. At no point did Hill disclose that Ohio-Lendco was, in fact, Hill. He allegedly received the excess funds of $64,000 through a deposit into his Ohio-Lendco LLC account at JP Morgan Chase. The other three properties in Portsmouth were at 1226 Summit St., 1824 High St. and 1606 High St. A fifth transaction took place in Columbus.
Soon after buying the properties, Hill sold four of them at inflated prices. Hill advertised to find potential buyers by promising the purchase of a home with no money down and even bad credit accepted. Using his position as a mortgage broker, court records indicate, Hill obtained financing for these buyers by making material false representations on their loan applications. These false representations included false income, exaggerated assets, and that the property purchasers would be providing the down payment to purchase the properties. Hill, unbeknownst to the lender, would then make the down payment for the buyers by purchasing official bank checks and naming the buyer as the remitter on the check. Hill sold the properties to unqualified buyers who eventually defaulted on their mortgage loans. Through the scheme, according to testimony, Hill fraudulently secured about $1,209,000 in mortgage loans from lenders. Due to defaults and foreclosures suffered by Hill and his buyers, the lenders suffered losses of about $657,000.
Hill was also sentenced to serve three years on supervised release after his prison term and he was ordered to pay $546,665.71 in restitution.
Frank lewis may be reached at 740-353-3101, ext. 232, or at email@example.com.