Pittsburgh woman pleads guilty

In the following press release United States Attorney Mary Beth Buchanan announced on August19, 2008, that on August 18, 2008, Joyce Davern, a resident ofPittsburgh, Pennsylvania, pleaded guilty in federal court to a chargeof Wire Fraud Conspiracy.Davern, 37, pleaded guilty to one count before Chief United States District Judge Donetta Ambrose.

Inconnection with the guilty plea, Assistant United States AttorneyBrendan T. Conway advised the court that Davern participated in a largemortgage fraud conspiracy that involved more than 75 loans and morethan $4.6 million in loan proceeds.  Davern and other members of theconspiracy, including her daughter, Kelly Fields (see below), recruited borrowersto purchase properties at far above the true fair market values of theproperties.  To secure financing to purchase the properties, Davern andFields submitted loan applications to lenders on behalf of theborrowers that contained false representations about the borrowers’financial condition.  In addition, Davern and Fields submittedfraudulent documents that supported the misrepresentations in the loanapplications, including false pay stubs, false W-2s, falseVerifications of Employment, and similar types of documents.  She alsosubmitted false appraisals to the lenders that overstated the truemarket value of the properties that were to serve as collateral for theloan.

And finally, Davern and Fields would cause the loanproceeds to be distributed contrary to the representations made to thelender about how the loan proceeds would be distributed.  For example,she failed to disclose that the sellers of the properties were payingthe buyers’ down payments, or that the sellers were otherwise kickingmoney back to the buyers and other members of the conspiracy.

JudgeAmbrose scheduled sentencing for November 14, 2008.  The law providesfor a total sentence of 20 years in prison, a fine of $250,000, orboth.  Under the Federal Sentencing Guidelines, the actual sentenceimposed is based upon the seriousness of the offense and the criminalhistory, if any, of the defendant.

The Mortgage Fraud TaskForce conducted the investigation that led to the prosecution ofDavern.  The Mortgage Fraud Task Force is comprised of investigatorsfrom federal, state and local law enforcement agencies and othersinvolved in the mortgage industry.  Federal law enforcement agenciesparticipating in the Mortgage Task Force include the Federal Bureau ofInvestigation; the Internal Revenue Service, Criminal Investigations;the United States Department of Housing and Urban Development, Officeof Inspector General; the United States Postal Inspection Service; andthe United States Secret Service.  Other Mortgage Fraud Task Forcemembers include the Allegheny County Sheriff’s Office; the PennsylvaniaAttorney General’s Office, Bureau of Consumer Protection; thePennsylvania Department of Banking; the Pennsylvania Department ofState, Bureau of Enforcement and Investigation; and the United StatesTrustee’s Office.

Mortgage industry members with knowledge offraudulent activity are encouraged to call the Mortgage Fraud TaskForce at (412) 894-7550.  Consumers are encouraged to report suspectedmortgage fraud by calling the Pennsylvania Attorney General’s ConsumerProtection Hotline at (800) 441-2555.

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