Mortgage scam fallout
Chico woman found guilty in housing scheme
A Chico real-estate broker was convicted March 29 on two counts of mail fraud connected to the local mortgage scam unveiled two years ago. A federal court jury found Kesha Haynie, 41, guilty following a six-day trial. The next day her brother, Niche Fortune, 39, was sentenced by U.S District Court Judge Edward J. Garcia to four years and nine months in prison after being found guilty of the same charges.
According to court documents, Haynie operated Empire Mortgage, and from April through December of 2007 she created fraudulent loan applications and promised homebuyers kickbacks from Chico builder Tony Symmes. Symmes, one of the most productive local housing contractors, pleaded guilty in May 2010 to money-laundering and mail-fraud charges. He was scheduled to be sentenced March 30, after several postponements, but that sentencing was pushed back again to April 13.
In 2006, as the local housing market cooled, Symmes found himself with more than 60 unsold new homes on his hands. He was approached by a man named Garrett Griffith Gililland III, who proposed the scheme of using straw buyers to secure inflated loans from out-of-area lenders. The loan applications included fraudulent information about the buyers’ incomes and credit histories. The day after the close of escrow, Symmes would write checks averaging $41,000 to those involved. Haynie and her helpers, including her brother, would pay the buyers up to $29,000 and divide the rest among themselves.
The houses were then rented out for a few months so they wouldn’t immediately foreclose and draw attention. Eventually, Butte County sheriff’s investigators noticed a pattern—they were discovering indoor marijuana grows in empty homes, some of which had been foreclosed upon. The Butte County District Attorneys Office and the federal government got involved, and Symmes, Haynie, Gilliland and Fortune were eventually arrested and charged.
Altogether, from 2006 through 2008, Symmes sold 62 homes, financed for a total of $21 million. Thirty-eight of the houses went into foreclosure, and 10 more were the subject of short sales. The losses added up to $5 million. Symmes has been cooperating in the investigation and has paid $4 million in restitution.
In 2008, Gililland and his wife, Nicole Magpusao, while under investigation, fled from their Canyon Oaks home to Argentina and then to Barcelona, from which they were extradited back to the States in 2010. They both pleaded guilty last May. Magpusao has been sentenced to time already served. Gililland is scheduled to be sentenced April 27. Others involved in the case include local builder William Baker, who pleaded guilty last July and is also scheduled for sentencing April 27. Shane Burreson of Orland, the president of Nor Cal Innovative Investments Inc., pleaded guilty last July to 13 counts of mail fraud and two counts of money laundering.
Following Haynie’s verdict, Judge Edward Garcia said the evidence against her was “overwhelming” and that she was “in denial.” She is in custody and scheduled to be sentenced on July 6. The maximum penalty for mail fraud is 20 years in prison, a $250,000 fine and three years of supervised release.
Haynie is married to local preacher Vince Haynie, who operates a charitable organization called Love Chapmantown and is the founder, along with his wife, of a church in Chapmantown called Rhema Word of Faith. Vince Haynie, who is also a political activist, has indicated his intention to run for Chico City Council. It is unknown if his political plans have changed in light of his wife’s conviction.