ATLANTA - Attorney General Thurbert Baker announced today that five people were indicted by the Gwinnett County grand jury for involvement in a "mortgage flipping" scheme. Kenneth Bradford (a.k.a. Ken Taylor), Jo Ellen Bryant (a.k.a. C.J. Taylor), Teresa Harriss, Brian Keith Cannon and Lloyd Smith are each charged with seven counts of theft by taking and one count of racketeering.

ATLANTA - Attorney General Thurbert Baker announced today that five people were indicted by the Gwinnett County grand jury for involvement in a "mortgage flipping" scheme. Kenneth Bradford (a.k.a. Ken Taylor), Jo Ellen Bryant (a.k.a. C.J. Taylor), Teresa Harriss, Brian Keith Cannon and Lloyd Smith are each charged with seven counts of theft by taking and one count of racketeering.

The alleged scheme worked as follows:

(1) The defendants would have a fraudulent, significantly inflated appraisal made of a residential home that was for sale in Gwinnett County.

(2) The defendants would then target an unknowing potential "straw buyer," whom they believed to have a good credit record, to purchase the homes as investment properties. The defendants would tell the straw buyer that the defendants would place renters in the home, collect rent, and forward the rental income to the straw buyer.

(3) The defendants would collect personal information from the straw buyer such as bank account numbers and employment information to prepare a mortgage application on the straw buyer's behalf.

(4) When preparing the mortgage application, the defendants would create false documentation about the straw buyer, inflating his income to ensure that he qualified for a loan for the inflated amount in the fraudulent appraisal. This false documentation included forged W-2s, income tax returns and verification of employment forms. This false documentation was submitted by the defendants, along with the mortgage applications, to financial institutions. The straw buyer would be approved for a mortgage based on the false documentation.

(5) The defendants would buy the home at the normal market price through a corporation called Prime Plus, which had been created by Bradford and Bryant.

(6) Often, on the same day as the above purchase, Prime Plus would sell the home to the straw buyer at the price contained in the inflated appraisal, realizing a profit.

(7) Prime Plus would forward checks to the straw buyer for a few months, claiming that the checks were rental income from the home.

(8) Eventually, Prime Plus would stop forwarding checks to the straw buyer, who would then default on the mortgage. The lending institution would then foreclose, and discover that the property was worth significantly less than the amount of the loan it had made based on the fraudulent appraisal.

The defendants are suspected of using this scheme on 20 separate occasions. If convicted, the defendants face up to 90 years in prison. No trial date has been set.

Baker said, "I will continue to aggressively pursue and prosecute those who try to defraud the consumers of this state. We cannot allow the perpetrators of a scheme like this, with so many victims, to go unpunished."