Financial Fraud: Dana Q. Roush Guilty Of a Conspiracy To Commit Mail Fraud And Equity Skimming
Greenville Business Owner Convicted in Federal Court of Conspiracy to Defraud
Greenville, South Carolina —- United States Attorney Sherri A. Lydon announced today that Dana Q. Roush, age 38, of Greenville, was found guilty of a conspiracy to commit mail fraud and equity skimming. A federal jury returned guilty verdicts late Wednesday evening after an hour and a half of deliberation. United States District Judge Timothy M. Cain of Anderson received the verdicts and will sentence Dana Roush and her husband Michael “Bubba” Roush,” who pleaded guilty to the mail fraud conspiracy prior to trial, after reviewing a Presentence Investigation Report which will be prepared by the United States Probation Office.
Evidence presented at trial showed that Dana and Bubba Roush owned and operated Kingdom Connected Investments, LLC (“KCI”). They marketed their company as a Christian organization and promised to create “win-win” situations for home sellers and buyers. They sought homeowners who often owed more on their home than the property was worth, and buyers who lacked good credit and thus could not obtain a conventional mortgage.
KCI promised to relieve the homeowner from the burdens of mortgage payments by “buying” the home and placing a buyer in the home who would rent-to-own. KCI promised to make all the sellers’ mortgage payments. KCI misled sellers to believe that they would be immediately removed from the property’s title and that they were no longer responsible for the original loan.
KCI promised buyers an easy road to homeownership. In exchange for the down payment (typically 10 percent of the purchase price), the buyers were told that they were renting-to-own and building up equity. KCI further concealed from the buyers that a third party—the seller—had an existing mortgage on the property that KCI was responsible for paying.
Rather than using the down payments and rents received from the buyers to pay the sellers’ mortgage payments, Bubba and Dana Roush used the money for personal expenses and to expand their real estate business.
The sellers, many of whom believed they were off the title and note, received foreclosure notices. They learned that KCI, despite having a renter in the home, had stopped paying on the mortgage. Buyers often learned they had no real ownership interest when the home was purchased by a third-party at a foreclosure sale and the new owner started eviction proceedings.
Victims of the scheme suffered myriad injuries including loss of money, dreams, and ruined credit. Special Agent Matt Jacobson of the Federal Bureau of Investigation testified that KCI received $2.6 million from buyers and only paid $1.4 million in mortgage payments. Approximately 130 properties were involved in the scam, and Agent Jacobson testified that in only two instances did a buyer actually become a homeowner and a seller not face foreclosure and ruined credit.
“Protecting South Carolinians from financial fraud is one of our top priorities,” said U.S. Attorney Lydon. “Dana and Bubba Roush lined their own pockets by preying on distressed homeowners and families hoping to achieve the American dream of home ownership. The U.S. Attorney’s Office will vigorously investigate and prosecute individuals like the Roushes who make false representations to enrich themselves at the expense of others.”
“This verdict is the result of excellent work by FBI Special Agents, prosecutors from the United States Attorney’s Office and investigators from the Department of Housing and Urban Development. I commend them all. These schemes, based on absolute greed, prey on the vulnerable by perverting trust. The FBI will continue to work with our partners to track down such schemes and bring those responsible to justice,” said FBI Special Agent in Charge Jody Norris.
In addition to the FBI, Department of Housing and Urban Development, Office of Inspector General (HUD OIG) participated in the investigation. Nadine E. Gurley, Special Agent in Charge at HUD, stated “HUD OIG is dedicated to protecting HUD from individuals seeking to defraud the Federal Housing Administration (FHA) program. HUD OIG will continue to partner with other federal, state and local authorities to ensure that corrupt individuals do not use their positions to enrich themselves at the government’s expense. We remain steadfast in working with the U.S. Department of Justice to pursue any unscrupulous individuals who attempt to defraud our programs for their own personal enrichment.”
The maximum sentence the Roushes face is imprisonment for 20 years, a fine of $250,000, and supervised release for three years. Special Assistant United States Attorney Ian Conits and Assistant United States Attorney Bill Watkins of the Greenville office prosecuted the case on behalf of the Government.