A Union City woman was one of 22 defendants charged Jan. 26 in a mortgage fraud case involving more than 40 homes and 230 condominiums in the metro Atlanta area.

Fifty-year-old Annette Spear was indicted as one of several “straw borrowers” in the Phillip Hill mortgage fraud scheme, according to U.S. Attorney David Nahmias.

A superseding indictment in the complex case alleges that Phillip E. Hill, of Blounstown, Florida, was the owner and operator of "We Build Atlanta, Inc.," "The Estate Firm, Inc.," "Estate Artistians of Georgia, Inc.," "Estates Atlanta, Inc.," and other Georgia corporations and that Hill controlled the affairs of each corporation. Nahmias said Hill held himself out to be a real estate developer, and either individually or through one or more of the corporations he controlled, purchased and sold numerous residential properties in the Atlanta area.

Hill and co-conspirators allegedly participated in a scheme to bribe a loan officer of Charter Bank and Trust and to obtain two lines of credit using false qualifying information, said Nahmias. The indictment also alleges that when confronted by Charter Bank officials, Hill falsely claimed that his interest in a loan owed by the Alcindor-Williams Group, LLC related to the sale of lots in Atlanta’s 4001 Cascade subdivision would allow him to pay back the line of credit.

The current indictment in which Spear was charged states that Hill and other co-conspirators participated in a scheme to defraud Centrum Financial Services, Inc. related to a $1.3 million loan granted to the Alcindor-Williams Group, LLC, Nahmias said. That loan was to finance the Alcindor-Williams Group's purchase of 27 undeveloped residential lots in the 4001 Cascade subdivision from Estates Atlanta, Inc. The scheme included submitting false documents to Centrum during the loan application process, including inflated appraisals, altered checks and false marketing plans, and making false statements regarding the down payment and investment of the Alcindor-Williams Group, LLC in the property, said Nahmias.

The indictment also charges conspiracy, bank loan fraud, wire fraud, mail fraud and money laundering related to mortgages obtained on the sale of approximately 50 homes and 230 condominiums, including the originally charged 13 homes in the 4001 Cascade subdivision. These homes were all owned at one time by one of the Phillip Hill entities. Each home was sold at an inflated price to a "straw borrower" who applied for a mortgage loan based upon the inflated price. Such a fraudulent transaction is called a mortgage "flip,” nahmias explained. The straw borrowers who participated in these mortgage flips were paid a kick-back out of the excess loan proceeds for the use of their name and credit, he added.

The victim lenders granted the loans based upon numerous false representations and documents regarding the credit qualifications of the straw borrowers as well as false representations that the straw borrower had paid a down payment, would reside in the home, and would be responsible for the loan payment. Some of the homes were "flipped" more than one time. Nahmias said the indictment also charges that Atlanta Sky View Living Management, LLC, participated in these secondary "flips."

Spear and four individuals from Atlanta, Michigan, New York and St. Lucia were charged as straw borrowers while defendents from Stone Mountain, Gainesville and Syracuse, New York were charged as recruiters for the borrowers. The indictment also charges four former Georgia appraisers and four mortgage brokers.

"The negative impact on our neighborhoods of this multimillion dollar fraud scheme extends far beyond the financial loss to the victim lenders,” Nahmias said. “The Phillip Hill mortgage fraud scheme charged in this indictment is the most extensive this office and federal investigative agencies have uncovered to date in the Atlanta area. This indictment is a major step forward in this office’s commitment to expose and eradicate mortgage fraud schemes in our community."