The couple took out substantial personal loans to buy their home, then defaulted on those loans
A former NASA technical manager and her husband have pleaded guilty to conspiracy charges after admitting to orchestrating a mortgage fraud scheme that spanned several years and involved falsified documents, according to the US Attorney’s Office for the Southern District of Texas.
Noreen Khan, 52, and her husband, Christopher Mayberry, 53, both of Missouri City, Texas, entered their pleas in federal court after investigators uncovered a pattern of fraudulent activity tied to the purchase and refinancing of their luxury home between 2017 and 2021. Khan had worked as a technical manager for NASA, while Mayberry was employed by a NASA contractor.
Fraudulent applications and false claims
Court documents revealed that the couple took out substantial personal loans to fund their home purchase, then defaulted on those loans. In an attempt to erase their debts, Khan and Mayberry claimed to be victims of identity theft. Prosecutors said Khan went as far as filing a false police report, submitting a fabricated complaint to the Federal Trade Commission, and contacting credit bureaus in an effort to have the loans removed from her credit record.
The couple admitted to signing three separate loan agreements with mortgage lenders, providing false employment information and submitting fake pay stubs, tax documents, and account statements.
Khan and Mayberry now face up to five years in federal prison and a possible $250,000 fine, in addition to the potential forfeiture of their luxury home. They have been ordered to pay $276,709 in restitution before their sentencing, scheduled for December 18 before US District Judge Charles Eskridge. Both remain free on bond pending the hearing.
The case was investigated by NASA’s Office of Inspector General-Office of Investigations, with Assistant US Attorney Heather Winter prosecuting.
Mortgage fraud remains a challenge
Mortgage fraud continues to be a concern for lenders and regulators, particularly as schemes become more sophisticated. A Florida man who orchestrated a $5 million fraud scheme involving distressed rental properties in western Pennsylvania was sentenced to six and a half years in federal prison. Meanwhile, a lawsuit filed on September 2 has drawn attention to major players in the mortgage industry, alleging fraud and regulatory violations in a VA-backed home loan.
Matt Seguin, senior principal of fraud solutions at Cotality, said that multifamily and investment property fraud led the mortgage fraud increases, while occupancy fraud held steady in Q2. Seguin did suggest things to spot the warning signs of mortgage fraud at origination
“They own another property that's a much higher value than the current subject property in a seasonal area, a mountain area, a beach area, where somebody probably typically would do a rental property. They probably would typically not live there full time," he told Mortgage Professional America.
"Also, are they moving somewhere where their commute to work is unreasonable? Since so many people today are working remotely, that’s a little harder. But if they have a job where they have to go on site, and they supposedly are moving three hours away. Does that commute make sense? Maybe it does in New York City, but not in many of the other places around the country."
