A Chico man today pleaded guilty in federal court in Sacramento to one count of mail fraud for his role in a multimillion-dollar "building bailout" mortgage fraud scheme.
During his plea hearing in district court, William E. Baker, 65, admitted that he and others conspired with Garret Griffith Gililland III, 30, formerly of Chico, to artificially inflate the sales prices of new homes sold to Gililland's buyers, according to a federal Department of Justice news release. After close of escrow, Baker & Baker Construction would rebate significant sums of money to a front company controlled by Gililland.
On one occasion, Baker misrepresented the purpose of the payments to Gililland's company as "improvements for three houses." In fact, officials said, Giilland's company made no improvements to homes sold by Baker to Gililland's buyers.
In court, Baker admitted to knowing that the lenders financed the properties at 100 percent of the inflated purchase price. He admitted that he intended to defraud lenders by inducing them to fund home loans in greater amounts than the real sales price, according to the news release. Baker also admitted that had the lenders known that the sales prices were inflated, they would not have approved the loans.
"This is another significant plea in an ongoing investigation of mortgage fraud involving subjects located throughout California and other states," U.S. Attorney Benjamin B. Wagner said in a written statement.
Other significant pleas in this case include those of Gililland, Anthony G. Symmes, 60, of Paradise, and Shane Burreson, 38, of Orland, the president of Nor Cal Innovative Investments Inc.
Remaining defendants include Leonard Williams, 49, of Sacramento, a licensed real estate professional; Brandon Resendez, 32, of Chico; and Kesha Haynie, 39, of Chico, a licensed real estate professional. They are scheduled for trial Sept. 12.