Friday, November 21, 2008
Biographical Background
For almost 12 years, Kristine Kelly owned and operated a very successful mortgage company, Kelly Mortgage Group Inc., with 12 loan officers under her, in Anderson, South Carolina. She was a divorced mother of 3, their sole provider. Her friends would say she did the perfect balancing act of being a driven entrepreneur by day, and a soccer mom by night. To everyone in the community, she looked like the picture of success thru hard work and determination. Her picture appeared in the local paper every day for almost 10 years in an advertisement for her company, making her a well-known recognized member in the community. One morning in 2002, however, Kelly’s picture appeared in the paper in a different context — below a headline accusing her of mortgage fraud offenses.
At age 35, Kelly found herself facing a 119-count federal indictment for participating in a scheme to prepare fraudulent and inflated appraisals of homes that were being financed through an Ohio-based mortgage company. Between February 2001 and August 2002, Kelly, whose primary business involved financing mobile home and land packages, defrauded the Ohio-based mortgage company by causing it to finance or re-finance these mobile home packages for more than they were worth, based on inflated appraisals. Kelly and her mortgage brokers applied for and obtained excessive and inflated mortgage loans on behalf of borrowers in order to bypass borrowers having to furnish a down payment or combining excessive debt into the mortgage loan, knowing full well the borrowers or the collateral would not qualify for such mortgage loans. Home and land package values were frequently inflated by $100,000 – and in one instance, by $180,000.
Kelly tells of how she herself was victimized by her former attorney, financially and thru poor legal representation. Once indicted, and on the edge of losing everything, Kelly took what little money she had left and hired a new attorney who allowed her to cooperate with the Secret Service and the U.S. Attorney’s Office and pled guilty to one count of conspiracy to commit mail fraud. She was sentenced to 20 months in federal prison, where she actually served 16 months, and ordered to pay $250,000 in restitution. Ultimately, almost two dozen people were convicted or pled guilty in connection with this home lending scam, including Kelly’s 30-year-old sister who worked as a mortgage loan processor at the company.
In the end, the home lending scam involved more than $13.5 million in inflated property values. The Ohio-based mortgage company that financed the fraudulently appraised homes reported losses of more than $3 million on 49 failed loans at the time of Kelly’s sentencing, and was expecting more losses.
Presentation by Kristine Kelly (and Hank Shea)
Today, Kristine Kelly makes joint appearances with Special Assistant U.S. Attorney and Fellow at the University of St. Thomas School of Law’s Holloran Center for Ethical Leadership in the Professions, Hank Shea. She made her first two public appearances last November at the St. Thomas School of Law's Public Forum on Mortgage Fraud and at the William Mitchell College of Law. Kelly speaks about her crimes and their consequences, providing an invaluable lesson on ethics for students and professionals, in order to "give back" or make some amends to society for her wrongdoing. Kelly acknowledges the harm that resulted from her criminal actions, although at time, she “had no idea of the far reaching effects of what I actually did, what I allowed to happen, and what I knowingly and unknowingly participated in.”
Shea adds his almost two decades of prosecutorial experience, offering the federal government’s perspective on mortgage fraud as he guides Kelly through telling her story in a question-answer format. Kelly tells her story from the perspective of a white collar criminal, revealing her actions that led up to her criminal wrongdoing; the role of lawyers, appraisers, and other professionals in the scam; and the devastating consequences her actions had on her reputation, her career, and her family.
Lessons to be Learned from Kelly
Unlike many convicts, Kelly views her time in prison as “a blessing. … It was worth every lesson. It changed me and renewed my faith in God. If my story can stop one family from going thru what I caused, then it was all worth it.” Kelly encourages audiences to avoid white collar crime by avoiding the mistakes she made, even in a fast-moving, high-pressure corporate setting. Kelly reveals in her presentation that she was a “good mother and business woman, and just got on a slippery slope.” She also warns not to abuse or be abused by friendships and business acquaintances by breaking the rules or asking them to break rules. Audiences gain a valuable lesson on ethics as Kelly recognizes that her wrongdoing, although motivated in part by a desire to help borrowers who needed a home or consolidation of debt, is not justified by good intentions. Kelly co-founded Ethicspreventfraud.com to reach others with her valuable lessons on ethics and shares her redeemed life story to the Glory of God.
To schedule a presentation with Hank Shea and Kristine Kelly, please contact: hjshea@stthomas.edu.
You can contact Kristi directly at : kristi@ethicspreventfraud.com