Houston mortgage brokers face 5 years in prison
By SAM GARCIA
2/19/2003

Two Houston mortgage brokers, one a former state House candidate for the GOP, have pleaded guilty in a case the government says involved more than $11 million in loans on flip real estate transactions.

John M. Beaird, 43, and Rudy Rudolph, 49, have entered into separate plea agreements with the government. Beaird pleaded guilty to one count of wire fraud, and Rudolph pleaded guilty to one count of mail fraud. Each face up to five years in federal prison and a $250,000 fine.

According to case documents provided by the Department of Justice, the two engaged in a scheme where fake documents enabled them to obtain loan approvals on properties used in flip transactions.

From 1996 to 2000 properties were purchased in the name of business entities created by the two, including American Residential Marketing, First Financial Group, and SNC Group. Properties were typically purchased by Beaird and Rudolph using proceeds from the subsequent flip transactions -- enabling them to avoid using their own cash.

The government accuses Beaird of engaging in 39 of these transactions for $11.5 million and Rudolph of 15 transactions for $4.8 million.

Lenders to which the two submitted fake documents included Countrywide Home Loans, Wells Fargo Home Mortgage, and WMC Mortgage Corp, according to indictment documents. Among the fake documents were a certificate of deposit receipt, bank records, rent check copies, W-2s, verification of employment, and tax returns.

Inflated appraisals also were involved, according to an announcement from the U.S. Attorney's office.

Beaird lost the Republican nomination for a Texas House District seat in 2000 to the incumbent, the government said in its announcement.

A poem written by Beaird, Who Is To Blame -- currently posted at http://sermons.11net.com/sermons/Blame2.txt -- opens with the following paragraph:

We read it in the papers and hear it on the air
Of killing and stealing and crime everywhere.
We sigh and we say as we notice the trend,
"This young generation...where will it end?"
But can we be sure that it's their fault alone?
Are we less guilty, who place in their way
Too many things that lead them astray?

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