RICHMOND, Va. (WRIC) — A Detroit man was sentenced to six years in prison for fraudulently conspiring to obtain over $650,000 in advance fees from borrowers seeking real estate loans, some of whom were located in Virginia.
According to the documents, 49-year-old Roscoe Copeland was the founder and CEO of Alexis Realty Solutions LLC (ARS), a Michigan-based company which purported to be an alternative funding source for prospective borrowers seeking loans for real estate purchases.
His co-conspirator, Dawnn Long acted as ARS’ chief operating officer.
The pair allegedly claimed that their company was a private lender with no “middleman,” and that the company had access to specialized bond funding at discounted rates.
The company catered to customers who had poor credit ratings or were otherwise unable to qualify for a loan from retail banks or other traditional funding sources, according to the Department of Justice.
“ARS offered unrealistically competitive interest rates to their customers, including as low as 1% for a traditional 30-year fixed mortgage,” said Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia.
As part of the fraudulent scheme, prospective borrowers paid their company an upfront fee, typically 3% of the loan amount, to purportedly secure a bond necessary to obtain the loan.
Copeland and Long also recruited individuals known as “consultants,” many of whom were real estate brokers or agents, to find prospective borrowers and direct them to ARS. Consultants were told that ARS would pay them a percentage of ARS’ proceeds after the loans were funded.
During the conspiracy, which lasted from approximately January 2017 to January 2018, Copeland and Long knowingly made repeated false statements to both prospective borrowers and consultants, according to the Department of Justice. These false statements included that the advance fees paid by customers would be held in escrow, the customers’ advance fees would be repaid in full if their loans did not fund within a set period and that ARS was a private lender with no middleman.
According to court documents, Copeland and Long, “routinely caused wire transmissions in interstate commerce, specifically wire transfers of advanced fees from prospective borrowers. Some of these wire transmissions came from or to locations within the Eastern District of Virginia from originating or destination locations outside the Commonwealth of Virginia.”
The Department of Justice said not a single customer of ARS received a loan.
Twenty-six prospective borrowers sent Copeland and Long over $650,000 in advance fees, the vast majority of which Copeland and Long spent on “lavish personal expenses,” according to the department.
The Department of Justice said many of the victims endured substantial financial hardship, including filing for bankruptcy, periods of homelessness, or delaying retirement, as a result of Copeland’s fraud scheme.
