Faith-based fraud

Dana and Michael “Bubba” Roush exploited faith, desperation, and longing to steal millions of dollars from home buyers and sellers alike. Now the South Carolina couple is headed to federal prison and on the hook for $2.6 million for their crimes.

The South Carolina couple owned and operated Kingdom Connected Investments (KCI), which they billed as a “Christian organization.” In reality, according to the Justice Department, KCI was a vacuum pump designed to take money from desperate homeowners and credit-challenged buyers and put it into the Roushes’ pockets.

KCI targeted underwater homeowners and buyers whose credit wasn’t strong enough to obtain a conventional mortgage, promising to create a “win-win” situation for both buyer and seller. The company promised to relieve the homeowner of the burden of mortgage payments by purchasing the home and renting it to a new buyer, who would rent to own. The company promised to make all the sellers’ mortgage payments, according to the Justice Department.

The company sold itself to buyers, meanwhile, as an easy path to homeownership. Buyers made a down payment – typically 10% of the purchase price – and were told they were renting to own and building equity.

Sellers were led to believe that they would be removed from the property’s title and were no longer responsible for the mortgage. Buyers were not told that the seller had an existing mortgage on the property.

None of that was true. Rather than using rents received from the buyers to pay the mortgages on the sellers’ homes, Dana and Michael Roush used the money for personal expenses and to expand their business, the Justice Department said. The sellers often learned that KCI had stopped paying the mortgage when they received foreclosure notices on homes they believed they no longer owned. The buyers often learned they had no real ownership interest only when the home was purchased at a foreclosure sale and the new owner started eviction proceedings.

All told, KCI received $2.6 million from buyers and paid just $1.4 million in mortgage payments, according to FBI Special Agent Matt Jacobson, who investigated the case. About 130 properties were involved in the scam, and according to Jacobson’s testimony, in only two instances did a seller not face foreclosure and ruined credit, and a buyer actually become a homeowner.

“These defendants here stole more than money,” said US Attorney Peter McCoy. “They robbed their victims of the American dream. For so many South Carolinians, times are tough right now. That these two defendants exploited that difficulty to line their own pockets is reprehensible, and this office will not tolerate it.”

“The fraud perpetrated by the defendants allowed them to steal millions of dollars from people who could not afford to lose any money,” said FBI Special Agent in Charge Jody Norris. “The victims were robbed of their life savings, their homes, and the futures they had planned.”

Following convictions for mail fraud and equity skimming, Dana Roush was sentenced to more than 11 years in prison, while her husband was sentenced to six and a half years. The Roushes were also ordered to pay more than $2.6 million in restitution.

Published at Tue, 13 Oct 2020 11:00:07 +0000

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