Three Kentuckians plead guilty to fraud charges involving mortgage applications

Three Kentucky residents pleaded guilty Friday in federal court in Lexington to wire fraud charges that involved false mortgage applications, according to the U.S. Attorney's Office for the Eastern District of Kentucky.

John Howard, 43, and Kevin Mullins, 40, both of Richmond, and Brenda C. Stone, 55, of Versailles admitted they fraudulently obtained millions of dollars in mortgage loans from 2006 to 2009, the U.S. Attorney's Office said.

Howard, a former mortgage loan officer and broker who owns Campus Downs Real Estate, admitted to fraudulently obtaining $2.9 million in mortgage loans. Howard admitted getting 11 loans for five Lexington properties by lying on loan applications and manipulating the filing of liens. He said he used those tactics to keep lenders from finding out he had borrowed money from other lenders on the same properties, the U.S. Attorney's Office said.

Mullins, former head of Republic State Mortgage's Central Kentucky lending operations, admitted he conspired with Howard on four loans totaling more than $900,000. Mullins admitted he let Howard, whose license had been revoked by state mortgage regulators, use his name to generate mortgage business. Mullins said he knew that several loans Howard created for clients contained lies about borrowers' finances and home purchase prices, the U.S. Attorney's Office said.

Stone, a former processor at Republic State Mortgage, admitted that she processed loan documents for a friend, knowing the documents contained fraudulent statements about the friend's income and whether the friend planned to use the property as a primary residence. A $225,000 fraudulent loan was issued, according to the U.S. Attorney's Office.

The guilty pleas came after several years of investigation by the FBI and the Kentucky Department of Financial Institutions. Mullins and Stone could be sentenced to a maximum of 30 years in prison; Howard faces up to 20 years. Howard, Mullins and Stone are to be sentenced Aug. 5.