An Alabama man who took part in a mortgage fraud scheme involving properties in Wildwood Crest and North Wildwood has admitted to conspiring to defraud financial institutions and launder stolen funds as part of a $15 million scam.

In a written release, U.S. Attorney Paul J. Fishman said Kinard Henson, 41, of Ventress, Ala., used phony documents and “straw buyers” to make illegal profits on overbuilt condos. Henson also admitted to the attempted murder of a straw buyer who was a witness to the mortgage fraud scheme.

Henson pleaded guilty Thursday before U.S. District Judge Jerome B. Simandle in Camden to conspiracy to commit wire fraud, conspiracy to commit money laundering, and attempted murder of a witness in a federal case.

Fishman said Henson was one of 11 defendants charged in July 2012 with conspiracy to commit wire fraud and conspiracy to commit money laundering related to mortgages on properties in North Wildwood, Wildwood Crest, other locations in New Jersey and in Florida.

Henson’s co-conspirators “located oceanfront condominiums overbuilt by financially distressed developers and negotiated a buyout price with the sellers.”

Then they caused the sales prices for the properties to be much higher than the buyout price to ensure large proceeds, Fishman said.

Other defendants helped conceal the actual prices of certain properties through inflated sales contracts and sale and finder’s fee agreements.

Fishman said Henson recruited a straw buyer to purchase certain properties at the inflated rates.

He explained that the straw buyers were people with good credit scores but who can’t qualify for mortgage loans. The conspirators created false documents, such as fake W-2 forms, pay stubs, bank statements and investment statements, to make the straw buyers appear more credit worthy to convince lenders to make the loans.

The fraudulent mortgage loan applications in the name of the straw buyers, including the supporting documents, were then submitted to mortgage brokers that the brokers knew were false. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings, Henson received a portion of the proceeds from his conspirators, after his conspirators had funds wired or checks deposited into various accounts they controlled.

Each of the conspirators then received money for their part in the scheme.

Fishman said Henson learned of a subpoena seeking documents in connection with a straw buyer’s purchases of real estate properties shortly after it was served by federal law enforcement agents on a mortgage brokerage firm.

In court, Henson admitted that he contacted another individual to kill the straw buyer.

“They then lured the straw buyer to a wooded area in Mobile, Ala. At Henson’s direction and using Henson’s firearm, the other individual shot the straw buyer multiple times,” Fishman said. The victim survived the shooting.

Henson is scheduled to be sentenced on July 11,

The wire fraud conspiracy charge comes with a maximum penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy charge has a maximum penalty of 10 years in prison and a $250,000 fine. The attempted murder of a witness charge carries a maximum penalty of 30 years in prison and a $250,000 fine.

Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; and IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen in Newark, for their roles in the ongoing investigation.

The government is represented by Assistant U.S. Attorneys Matthew T. Smith and Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden. Henson’s attorney is Stanley King of Woodbury.

Contact Trudi Gilfillian:

609-463-6716

Senior copy editor for the Press of Atlantic City. Have worked as a reporter, copy editor and news editor with the paper since 1985. A graduate of the University of Delaware.