BALTIMORE—U.S. District Judge Marvin J.
Garbis sentenced Winnie Joanne Barefoot, a/k/a Winnie Jo Budzina, a/k/a Winnie
JoAnne Conn, a/k/a Joanne Knopsnyder, a/k/a Olivia JoAnne Morgan, a/k/a Olivia
JoAnne Barefoot Morgan, age 59, of Annapolis, Maryland, today to five years in
prison, followed by five years of supervised release, for bank fraud, arising
from her use of numerous identities to fraudulently obtain real estate and
commercial loans, while applying for and fraudulently receiving Social Security
disability benefits. Judge Garbis also ordered Barefoot to pay restitution,
with the exact amount to be determined.
The sentence was announced by United
States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent
in Charge Richard A. McFeely of the Federal Bureau of Investigation; Special
Agent in Charge Michael McGill of the Social Security Administration-Office of
Inspector General, Philadelphia Field Division; Postal Inspector in Charge
Daniel S. Cortez of the U.S. Postal Inspection Service-Washington Division; and
Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of
Inspector General of the Department of Health and Human Services.
“Today’s sentence illustrates the
commitment of Postal Inspectors to vigorously pursue individuals who use U.S.
Mail as part of these complex fraud schemes,” said Peter R. Rendina, Acting
Inspector in Charge, U.S. Postal Inspection Service, Washington Division. “With
today’s challenging economy, it is critical we make every effort to protect our
financial institutions and consumers by ensuring the integrity of the U.S.
mail. Our proud tradition of working with several law enforcement agencies, as
in this case, demonstrates that individuals who commit fraud and threaten the
financial health of our communities will be brought to justice.”
From December 2005 to August 2009,
Barefoot used the identity of Olivia JoAnne Morgan and her daughter to engage
in fraudulent real estate and loan transactions, including transactions
involving three properties in Annapolis and a business entity she operated.
In late 2005 and early 2006, Barefoot
acquired residential property at 3528 Narragansett Avenue in Annapolis in her
daughter’s name. She used a forged document in which her daughter purportedly
gave Barefoot power of attorney to apply for financing in the amount of
$616,250 to purchase the property. In the application to the lender, Barefoot
falsely represented her daughter’s assets and ability to pay for the property.
The daughter never occupied the property, the property went into foreclosure,
and the lender lost $415,000.
During the summer of 2006, Barefoot also
acquired property at 896 Coachway, The Downs, in Annapolis. She applied for a
first and second mortgage loans in the amounts of $780,000 and $195,000,
respectively, using the identity Olivia JoAnne Morgan. She falsely represented
her income and assets to the lender and that she intended to use this as her
primary residence. Although her daughter and granddaughter briefly occupied
this residence in September-October of that year, the property likewise went
into foreclosure and the lender lost $276,000.
In February 2007, Barefoot used a false
Social Security number to apply to a bank to increase an existing home equity
credit line from $1.3 million to $2.1 million on property at 1588 Eaton Way in
The Downs, Annapolis, where she resided from 2002 to 2009 with a man whom she
falsely represented to be her husband. Barefoot falsely represented in the loan
application that she and her “husband” each had monthly income of $25,000 and
that her net worth was over $10 million. Barefoot withdrew all of the
credit—about $800,000—from the increased line of credit. When she and the
purported husband stopped making payments on the loan, the property went into
foreclosure, and the bank lost $700,000, plus attorney’s fees and foreclosure
costs.
During the time of these fraudulent
schemes, Barefoot sought and fraudulently obtained supplemental security income
from the Social Security Administration (SSA), claiming that she was disabled
beginning in 1997 due to back problems. To obtain the benefits, Barefoot
falsely: stated that she lived at a PO Box address in Crownsville, Maryland;
denied ever having been convicted of a felony, when, in fact, she was arrested in
1980 and convicted of federal and state felony offenses; and represented that
she had no resources nor received any type of income. Barefoot was ultimately
approved for disability benefits in April 2007 and fraudulently received more
than $26,000 in benefits. In December 2008, Barefoot falsely represented to SSA
representatives investigating her eligibility for benefit payments that she
lived alone at 896 Coachway and did not own the house and that “Olivia Joanne
Morgan” was her sister, who was married to the man who resided at 1588 Eaton
Way. Barefoot eventually returned the $26,000 in Social Security benefits that
she unlawfully obtained.
In February 2007 and September 2008, at
about the same time that she applied for and received Social Security disability
benefits, Barefoot obtained two commercial lines of credit loans of $250,000
and $120,000 to finance a hyperbaric oxygen chamber business. On the first
application she used a false Social Security number and falsely represented
that income and the combined assets for herself and her purported husband were
over $12 million; and that the value of the Eaton Way property was $4 million
and that it was unencumbered. In the second application, she falsely
represented that her monthly income was $30,861; annual sales from the business
were $1.1 million; and that she had not filed bankruptcy in the past 10 years,
although in fact she filed bankruptcy in 1999.
Finally, beginning sometime in January
2008 through at least August 2010, Barefoot operated another hyperbaric oxygen
chamber business, Advanced Hyperbaric Oxygen LLC. During that time period, she
fraudulently billed for physician hyperbaric oxygen therapy sessions and
physician evaluation and management services when no such physician services
were provided. These fraudulent billings caused a loss to Medicare of $75,814;
to CareFirst BlueCross BlueShield of $433,956; to Aetna of $354,736; and to
Humana of $7,924, for a total of at least $872,430.
The total amount of loss resulting from
all of the fraud schemes described above is over $2,659,430.
The Maryland Mortgage Fraud Task Force
was established to unify the agencies that regulate and investigate mortgage
fraud and promote the early detection, identification, prevention, and
prosecution of mortgage fraud schemes. This case, as well as other cases
brought by members of the task force, demonstrates the commitment of law
enforcement agencies to protect consumers from fraud and promote the integrity
of the credit markets. Information about mortgage fraud prosecutions is
available www.justice.gov/usao/md/Mortgage-Fraud/index.html.
This law enforcement action is part of
President Barack Obama’s Financial Fraud Enforcement Task Force. President
Obama established the interagency Financial Fraud Enforcement Task Force to
wage an aggressive, coordinated, and proactive effort to investigate and
prosecute financial crimes. The task force includes representatives from a
broad range of federal agencies, regulatory authorities, inspectors general,
and state and local law enforcement who, working together, bring to bear a
powerful array of criminal and civil enforcement resources. The task force is
working to improve efforts across the federal executive branch and, with state
and local partners, to investigate and prosecute significant financial crimes,
ensure just and effective punishment for those who perpetrate financial crimes,
combat discrimination in the lending and financial markets, and recover
proceeds for victims of financial crimes.
United States Attorney Rod J. Rosenstein
thanked the FBI, SSA-OIG, U.S. Postal Inspection Service, and HHS-OIG for their
work in the investigation. Mr. Rosenstein commended Assistant United States
Attorney P. Michael Cunningham, who prosecuted the case.
1 comment:
Wow what a slap on the wrist. Anyone following this case, that has a extra 5 years to spare can clearly see that this is a Great way to pick up a couple million dollars, with guaranteed free food and shelter for 5 years.
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