Man accused in $35 million mortgage fraud scheme

July 22, 2010 (CHICAGO) Authorities say Kenneth Steward bought and sold homes and recruited others to act as residential purchasers. They also allege his co-defendants caused various lenders and financial institutions to lose at least approximately $16 million on mortgage loans that were not repaid by the borrowers or fully recovered through subsequent foreclosure sales.

Steward, 44, who reportedly operated various businesses -- including a property renovation company called Jireh Development in South Holland, was arrested Tuesday by FBI agents and U.S. Postal Service inspectors, according to the office of U.S. Attorney Patrick Fitzgerald.

Steward reportedly was charged with mail, wire and bank fraud in an 18-count indictment that was returned by a federal grand jury last week and unsealed following his arrest.

Officials said Steward remained in federal custody Thursday pending a detention hearing at 1 p.m. Friday.

Authorities say the other six defendants, including two licensed loan officers and an unlicensed loan officer and mortgage originator, were each charged with one or more counts of fraud in the same indictment.

They are scheduled to be arraigned Tuesday, July 27.

The scheme allegedly ran between June 2004 and May 2008, according to Fitzgerald, who announced the charges Thursday along with representatives from the Chicago offices of the FBI and the U.S. Postal Inspection Service.

"For generations, home ownership has been one of the measures of the American Dream," Mr. Brady reportedly said. "Some individuals have turned to criminal activity to profit from these circumstances. The U.S. Postal Inspection Service, along with our law enforcement partners, is committed to aggressively pursuing those who seek to actively engage in mortgage fraud schemes at the expense of others."

Authorities say among those also indicted were James Wilson, 62, of Chicago, who allegedly created false documents and sold them to clients to enable them and others to fraudulently obtain mortgage and automobile loans; Vanessa Mayes, 41, of Chicago, an unlicensed loan officer; William Bart Rusk, 52, of Woodridge, a licensed loan officer; Stephen Iwerebon, 45, of Oak Park, who owned an unnamed real estate company that purchased, renovated and re-sold residences; Emmit Suddoth, 38, of Chicago, who also bought and sold homes and operated purported property management companies; and Lennell Willis, 47, of Frankfort, another licensed loan officer.

According to the indictment, the defendants provided false residential real estate loan applications and supporting documents to banks and lenders on behalf of prospective purchasers, knowing that these individuals, whom they had recruited, could not, or did not intend to, fully repay the loans.

Steward and Suddoth and others allegedly referred and recruited individuals to buy homes by promising potential purchasers that they would not have to use any of their own money for down payments or deposits; they would be paid to act as purchasers and attend closings; in some instances, they would not have to make any payments on the mortgages obtained; and the homes were ready for occupancy or would be renovated.

According to authorities, the charges are part of a continuing effort to investigate and prosecute mortgage fraud in northern Illinois and nationwide under the umbrella of the interagency Financial Fraud Enforcement Task Force, which they say was established to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.

For more information on the task force, visit

Officials say each count of bank fraud, or mail or wire fraud affecting a financial institution, carries a maximum penalty of 30 years in prison and a $1 million fine and restitution is mandatory.

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