In Hall’s Court, Mortgage Fraud Leads To Jail

Kwame Nkrumah did not cause the national housing market to crash, driving families all over the country from their homes and plunging the economy into a recession.

He did do his part, in the view of Judge Janet Hall. So she sentenced him to 48 months behind bars.

Hall delivered that sentence — and a reflection on individual swindlers’ role in the housing crash — during a 90-minute proceeding Thursday in New Haven’s U.S. District Court.

She didn’t sentence the Kwame Nkrumah who helped liberate Ghana from British rule in 1957. That Kwame Nkrumah died in 1972.

Instead she sentenced a 57-year-old New Haven man who was born as Roger Woodson and later adopted the name of the late Ghanian leader. Under both names, that Kwame Nkrumah has been getting arrested and shuttling in and out of jail since his teenage years for committing crimes ranging from drug dealing to arson to real-estate fraud.

He came before Hall Thursday as one of a platoon of conspirators in one of several wide-ranging mortgage-fraud rings that stiffed lenders (included the federal government) and bilked millions of dollars out of crumbling New Haven properties and left them to rot and eventually be foreclosed upon in struggling New Haven neighborhoods in recent years. The locations his ring hit included Lilac Street in Newhallville, Lloyd and James streets in Fair Haven, Howard and Greenwich avenues in the Hill, and Elm Street in Dwight/Kensington.

Instead of liberating a Third World country, this Kwame Nkrumah admitted to helping allegedly crooked appraisers, lawyers, Realtors, and bag men plunge pockets of New Haven neighborhoods into Third World housing conditions.

That kind of crime is more difficult to explain than, say, a mugging or a hit-and-run. Often more difficult to prosecute as well. Yet it can have longer-lasting effects on city neighborhoods. Over the past decade the feds have started aggressively investigating the fraud rings in New Haven and bringing their perpetrators to justice. (Read about some of those cases here, here, here and here.)

Judge Hall sought to put that crime in perspective during Thursday’s sentencing in her third-floor courtroom.

“I don’t mean to charge you with the collapse of the” national housing and financial markets in 2007, she told Woodson/Nkrumah.

“But it took people like you to do what you did to lead to that collapse. A lot of people. …

“That’s what undermined our markets. That caused a lot of harm to a lot of people.”

In weighing Woodson/Nkrumah’s sentence, Judge Hall also wrestled with a second philosophical question: How many second chances are enough?

Empire Built On Straw

Woodson/Nkrumah has gotten many second chances. By his own account in a document submitted to the judge, he began using heroin as a 14-year-old growing up in the old Elm Haven projects. His serial arrests over the next decade-plus stemmed from his drug problems, he said.

After that, he said, he got clean — from drugs. But he kept committed crimes. He committed some of them even while on parole. Federal and state authorities have convicted him in 10 different cases ranging from narcotics to threatening to arson: in 1989 he torched a property he was rehabbing ​“under the table” on Lamberton Street the Hill neighborhood, in order to cash in on insurance money. He was under federal supervised release at the time.

He served 13 years in jail for that incident. Just two years later, while still on probation, he became part of a broad mortgage-fraud ring. The ring arranged fake purchases and sales of rundown homes in order to obtain inflated mortgages, then divided the proceeds among themselves rather than putting them into the properties, which they abandoned.

The scam that ring and others like it ran worked like this:

The scammers buy a rundown, often abandoned, New Haven property for cheap. The scammers pretend to sell the property for up to 10 times the price to a new ​“buyer.” But the scammers are just pretending to make the sale. They’re keeping the property themselves without having much if any real money change hands. The scammers find a low-income person (a ​“straw buyer”) willing to pretend in legal documents to be purchasing the property. Then the scammers get six-figure mortgages in the name of the straw buyer based on the phony sale price. In return, the straw buyer gets a bag of cash ($10,000 in an already litigated case). The scammers sometimes enlist others — lawyers, appraisers — to prepare phony documents pretending the straw buyer has a job to support paying back the mortgage, and alleging a $20,000 property, say, is worth $150,000. Then the scammers pocket the mortgage money. They collect rents on the properties while letting them continue to slide. Eventually lenders foreclose on the properties, the scammers walk away, and a new wave of slumlord/outside investors often moves in.

Woodson/Nkrumah didn’t serve as ​“ringleader” in his team of scammers. Nor was he a bit player. He played a ​“supervisory” role in some of the 48 property swindles the team undertook, according to both the defense and prosecution attorneys. He found some of the properties. He coordinated the preparation of fake documents to serve as a basis for obtaining the loans. He lined up straw buyers, including an unemployed public-housing tenant whom the ring pretended had spent hundreds of thousands of dollars on homes he purportedly planned to (but never did) live in. Click here to read a story all about that and about the specifics of the charges against Nkrumah.

For his role, Woodson/Nkrumah took in far less than the hauls the ringleaders typically keep in these swindles. He earned considerably more than the $10,000 a straw buyer can typically take home. His take-home pay added up to $116,020.07 for the several transactions for which he was sentenced Thursday.

Woodson/Nkrumah pleaded guilty to two charges of conspiracy to commit mail, wire and bank fraud in connection with those transactions. Both his attorney and the federal prosecutor agreed with the above depiction of his role.

What they disagreed on: How much time he should serve as a result. Woodson/Nkrumah appealed to the judge to sentence him only to the 18 months he has already served since his arrest in this case. The feds wanted him behind bars for a total of 57 months. Both sides appealed to Hall to take his personal history into account — in two very different ways.

Second Chances

Woodson/Nkrumah said he has learned from his past mistakes and turned his life around since this most recent arrest. He asked the chance for another chance, so he can be home with family members who depend on him.

“I deeply regret my mistakes,” the defendant, dressed in loose-fitting tan prison garb, read from a typewritten page while facing the judge. He promised to be more ​“careful” about his actions once released from jail.

He spoke of how he has married in recent years, how he has a 5‑year-old daughter and a 3‑year-old grandson he cares for. He spoke of caring for his octogenarian mother, who has Alzheimer’s. His wife, mother, and other family members and friends wrote heartfelt letters to Judge Hall about how responsible Woodson/Nkrumah has become, how seriously he takes his responsibilities to them. Eight of those relatives showed up in the courtroom, a fact the judge noted. (You can read their letters toward the bottom of the defense sentencing memorandum.)

His defense attorney, Ross Garber, took it from there.

“The government portrays Mr. Nkrumah as the sum of his rap sheet. That’s not who Mr. Nkrumah is,” argued Garber (who earned statewide fame when he represented former Gov. John Rowland at his impeachment hearings at the state Capitol).

“Mr. Nkrumah is not the person he was when he was 17 or 27 or even 37. There are things in one’s life that drastically alter how one views things.”

The prosecutor, Assistant U.S. Attorney David Huang, urged the judge to view Nkrumah’s history a different way. Five different ways:

• As the story of someone who has continued to commit crimes his whole life, over four decades.

• As the story of someone who committed those crimes even while still under court supervision for previous offenses, when the stakes were higher.

• As the story of someone who wasted no time committing those new crimes after his release from jail, rather than being deterred by the prospect of returning.

• As the story of someone whose crimes were not isolated, but connected to each other — both arson and mortgage fraud involving shady real-estate dealings.

• As someone who has run out of ​“second chances.”

Read the government’s full argument in this sentencing memorandum.

“Perhaps Mr. Nkrumah should have been ​‘extra careful’ after [escaping prison sentences in] his first five convictions,” Huang argued. ​“But he kept on going.” Even subsequent jail sentences didn’t deter him.

“He’s already gotten lenient sentences. He’s asking for another one,” Huang continued. “… The government wonders what would have happened if [he] had gotten stiffer sentences” before and not been free to commit new crimes?

“Everyone is deserving of second chances. Is Mr. Nkrumah, considering what he’s done, deserving of an 11th, or 12th chance?”

What About Donald Trump?

Judge Hall proved more swayed by the government’s argument on that matter. She gave Woodson/Nkrumah ​“credit” for the responsibility he has taken for his child and mom. She also credited him for pleading guilty instead of going to trial, allowing the government to devote more resources to other investigations. But she said she needs to ​“protect the public from further criminal acts from you.”

“The conventional wisdom is that somebody at your age and stage of life will put it behind them,” she said. But, she noted, he was already 50 when he committed these latest offenses. ​“I can’t confidently say you will leave prison and not commit another crime. I hope you don’t … but I hope you seriously think about how you approach life.”

Then she sentenced him to concurrent 48-month sentences, including time already served, followed by a total of five years of supervised release, for the two charges to which he pleaded guilty. She ordered him to make restitution to lenders for the $116,020.07 he pocketed. She dismissed all other charges against him.

Outside the courtroom after the sentencing hearing ended, Woodson/Nkrumah’s relatives argued that the judge should have let him go with time already served.

“You have people out there that are stealing every day. They get away with it,” said his sister Carolyn. ​“Donald Trump is doing it it. He’s getting away with it. He buys up these properties. He gets the money. He files bankruptcy.”

She noted that the president and other leaders urged the country to help as many people as possible buy homes over the past few decades; people regularly were able to obtain houses with no money down.

“A lot of people do whatever they can to help a person get a mortgage. All they’re trying to do is help people out,” including helping them with verification documents, added a cousin (who declined to be named). ​“It’s against the law to do that. They don’t think about that. They want” to feed their families.

The defendant’s brother, Doug Woodson (pictured outside court with the cousin), agreed.

“How’s it against the law?” he asked. ​“People go to seminars” to learn this stuff.

Judge Hall will get more chances to weigh in on the consequences of mortgage fraud. Those remaining to be sentenced include two of the ringleaders in this case, Joseph Levitin and Ronald Hutchison, who earned far more than Woodson/Nkrumah did. They have pleaded guilty, as well. The government has yet to schedule their sentencing, often a sign that the defendants have cooperated with investigators looking to convict other participants lower on the food chain. When their day of reckoning arrives, we’ll see if they pay as steep a price.