4th Pleads Guilty In Loan Plot

Mortgage-aid Scheme Bilked Dozens In Distress Out Of Their Homes

April 16, 2009|By Nick Madigan | Nick Madigan,nick.madigan@baltsun.com

With a guilty plea Wednesday by a 52-year-old Takoma Park man, federal prosecutors brought to a close their case against four defendants accused of orchestrating a large-scale mortgage scheme that cost dozens of people their homes.

Acknowledgment by Earnest Lewis that he had committed wire fraud came a day after a similar admission in U.S. District Court by his 57-year-old brother, Michael K. Lewis, also of Takoma Park, who pleaded guilty to conspiracy and bankruptcy fraud arising from a scheme in which, prosecutors said, he and his co-conspirators targeted financially vulnerable individuals who were trying to save their homes from foreclosure.

The other two defendants, Cheryl Brooke, 52, of Upper Marlboro, and Winston Thomas, 43, of New Carrollton, pleaded guilty Monday to various charges in connection with the scheme, in which the defendants were accused of distributing among themselves loans they obtained for the distressed properties, leaving the homeowners with nothing.

Earnest Lewis faces a maximum prison term of 20 years when he is sentenced on Aug. 10 by U.S. District Judge Deborah K. Chasanow at the federal courthouse in Greenbelt. As part of his plea agreement, Lewis agreed to forfeit more than $2.2 million in proceeds from the scheme.

His brother also faces a maximum of 20 years in prison for conspiracy, with an additional five years for bankruptcy fraud. He is to be sentenced Aug. 17. Under his plea agreement, Lewis agreed to forfeit an amount identical to his brother's.

Brooke and Thomas might also receive up to 20 years for conspiring to commit wire fraud. Brooke could be sentenced to an additional five years for bankruptcy fraud. Both will be sentenced July 31.

"Homeowners in financial distress should avoid smooth-talking con artists and seek reliable and independent advice," Rod J. Rosenstein, U.S. Attorney for the District of Maryland, said in a statement.

A 12-count indictment unsealed in June said the four began airing television advertisements in 2004 aimed at financially vulnerable homeowners, offering them help in improving their credit, saving their homes from foreclosure and assisting them in case of bankruptcy.

Homeowners who called the toll-free number were invited to meet Michael Lewis, for a fee. At the meetings, Lewis encouraged them to purchase a variety of services, such as the Michael K. Lewis Financial Diet for reducing debt and a "legal plan." Instead of helping the homeowners, the indictment said, the defendants acquired control of the homes and then failed to pay the mortgages on them, causing the original owners to default.

The indictments in June against the foursome came less than a week after federal prosecutors accused eight other people of bilking Maryland homeowners and banks of more than $35 million in an unrelated mortgage scheme.

Six of the eight have since pleaded guilty to various charges. The remaining two are scheduled to be tried in July.

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