In separate telephone interviews with the NNPA News Service, Harvard Law Professor Charles J. Ogletree, Jr. and Lewis Myers, Jr., a well-known attorney in Chicago, said they expect Mr. Ballentine to be fully vindicated.
“I have no doubt at all,” Prof. Ogletree said. “This is not a close case—we will win. But it doesn’t matter now because all that is in the press is, ‘Celebrity Lawyer involved in $10 Million Scam.’ ”
The U.S. Attorney for the Northern District of Illinois, based in Chicago, announced in late January that Mr. Ballentine had been indicted by a federal grand jury for allegedly engaging in two mortgage fraud schemes, one from Dec. 2004 to Feb. 2005 and another one from Feb. 2005 to May 2006.
“The defendant, Warren Ballentine, allegedly schemed with others to obtain more than two dozen fraudulent mortgage loans and represented buyers of multiple closings, knowing that they were fraudulently qualified for loans to purchase homes in Chicago and various southern suburbs,” a press release from the U.S. Attorney’s office said.
Mr. Ballentine, 41, who was born on the South Side of Chicago, lived in Country Club Hills, Ill., before moving to Durham, N.C. He was charged with two counts of bank fraud, two counts of making false statements to lenders, one count of mail fraud and one count of wire fraud. Each count carries a maximum penalty of 30 years in prison and a $1 million fine.
He was scheduled to be arraigned in federal court in Chicago on Feb. 12, where he was expected to enter a not guilty plea.
Before Mr. Ballentine was provided an opportunity to tell his side of the story in court, Reach Media canceled his popular radio show, which has been nationally syndicated since 2007.
Marty Raab, a company spokesman, said by e-mail, “I can share that effective today Thursday January 31st, 2013, The Warren Ballentine Show has been replaced with Trending Today. Warren Ballentine is no longer with Reach Media.” Radio One owns 80 percent of Reach Media, which was started by radio personality Tom Joyner.
Mr. Raab refused to explain why Reach Media dropped the show rather than suspend Mr. Ballentine, pending the outcome of the legal proceedings. He also refused to say why the company ended Mr. Ballentine’s show before he even appears in court to enter a plea.
Mr. Ballentine’s lawyers would not allow him to be interviewed prior to the conclusion of legal proceedings against him. However, the former talk show host posted on his Facebook account: “To all of you who are showing support thank you!! Im innocent!!!!! I may be off the air for now but Im going to fight to clear my name. All I can say is this reach media and radio one just through [sic] me away like I was garbage…”
In another Facebook posting, Mr. Ballentine said, “PLEASE PRAY FOR ME for I may lose everything I worked so hard for because of someone else’s lies. THIS IS A NIGHTMARE.”
Those who know Mr. Ballentine say he is an astute negotiator who would not engage in illegal activity, especially at the risk of losing his lawyer’s license and earning the standard $200-$500 per real estate closing while others were making millions.
Mr. Myers, the Chicago attorney, said: “I know how people like Bobbie Brown and Wanda Rivera-Burton (two key participants in the schemes) can just run this thing through the mill. The irony of it is you can get decent, innocent citizens caught up in this, not with any criminal intent, maybe through lack of vigilance that may have been warranted, but not the level where it should rise to criminal conduct.”
According to the federal indictments, Bobbie L. Brown, Jr., Wanda Rivera-Burton and more than 30 others operated a crime ring that included attorneys, tax preparers, mortgage brokers, loan officers, notaries, homebuilders, and fake home buyers in Nevada, California and Illinois.
In order to obtain more than 150 fraudulent mortgage loans, prosecutors say:
• People were solicited to pose as buyers purchasing a house at no money down to serve as their primary residence; they would make similar representations later when purchasing additional homes;
• False documents were created to help applicants qualify for loans, including untrue statements about applicant’s employment, income, assets as well as false tax returns;
• False verification systems were created to purportedly verify rent, leases, deposits and money in bank accounts;
• Home builders and sellers would agree to inflate the purchase price, with finder’s fees or real estate commissions ranging from 5 to 30 percent of sale price going to Brown and others;
• Some property would be purchased by using stolen Social Security numbers and other stolen ID;
• Homebuyers recruited for the scheme were told the homes would be rented out for a year and then re-sold at which time their names would be removed from the deed. They were told they wouldn’t have to make any mortgage payments in the meantime;
• After buyers failed to make payments, the houses went into foreclosure.
Most of those charged in the scheme have been convicted and sentenced to prison.
Federal prosecutors identified Bobbie L. Brown, Jr., who operated several businesses, including Chicago Global Investments, Inc. and B&M Custom Homes, Inc., as the chief organizer of the scheme. He pleaded guilty to mail, wire and bank fraud and was sentenced two years ago to 20 years in federal prison. Mr. Brown was Mr. Ballentine’s next door neighbor in Country Club Hills, a suburb south of Chicago.
Mr. Ballentine, who specialized in criminal defense, family and entertainment law in Chicago, began doing real estate closings for Mr. Brown almost as a favor. On some occasions, Mr. Ballentine would be leaving home and Mr. Brown would ask him to do a real estate closing for him that day, if he were available. And Mr. Ballentine would, picking up several hundred dollars in what lawyers call “easy money.”
Referring to Mr. Ballentine, Prof. Ogletree said, “He was a new lawyer, new to his career. The guy says, ‘We want you to come in. You’ll get paid. I just need you to sign these documents. I’ve got the buyer and seller coming.’ He doesn’t realize the folks who were in the same scheme were really lying about really buying property. That’s how he got caught up.”
Prof. Ogletree also explained, “The good thing we’ve heard from one of the witnesses is that Warren didn’t know what was going on and then when he figured it out—this was way back in 2006—he stopped doing it. One of the people who’s now in jail said that.”
The other person linked to Mr. Ballentine is Wanda Rivera-Burton, co-owner of B&W Investments and Property Management, Inc. She handled a home re-financing for Mr. Ballentine’s mother, who mentioned that her son was an attorney.
Ms. Rivera-Burton has pleaded guilty, but is awaiting sentencing. She has signed a cooperation agreement with prosecutors and is working with them to bring cases against others, presumably including Mr. Ballentine, in hopes of getting a more lenient sentence.
Mr. Brown and 33 others were indicted in August 2006. However, Mr. Ballentine wasn’t indicted until Jan. 2013, which Mr. Ballentine’s lawyers view as reflecting a weak case against their client.
Perhaps the most damaging charge against Mr. Ballentine in the indictment was that he allegedly “represented buyers at multiple closings within short time frames, knowing that the buyers were falsely representing that they would use each property they purchased as their primary residence.”
For example, he saw the same buyer on December 30, 2004, February 4, 2005 and February 9, 2005, according to the indictment. He allegedly saw another buyer on Jan. 13, 2005 and again on Feb. 18, 2005.
Atty. Myers said it is not unusual for closing attorneys to pay little attention to buyers they had not seen previously or expected to see again.
“They say, ‘If you don’t know, you should have known,” Atty. Myers said. “If that’s the case, a whole lot of lawyers are in serious trouble.”
According to those familiar with the case, Mr. Ballentine handled about 28 closings for Mr. Brown and Ms. Rivera-Burton, earning in the neighborhood of $10,000 over a 3-year period.
Why would Mr. Ballentine risk losing something as valuable as his law license for just slightly more than $3,000 per year?
According to Attorney Lewis Myers, Jr., he wouldn’t. But until Mr. Ballentine is vindicated, he will have to live with headlines such as the one appearing in the Chicago Sun-Times: “‘People’s Attorney’ radio show host indicted in $10 million mortgage fraud.”
Charles Steele, CEO of the Southern Christian Leadership Conference (SCLC), said, “Warren Ballentine is a man of integrity and has contributed too much to our community for us to turn our back on him.” Mr. Steele added, “It’s really wrong to take his radio show away from him before he has had his day in court.”
Atty. Myers is confident that Mr. Ballentine will be vindicated in court but worries about the impact of losing his radio show and misleading newspaper headlines will have on his ability to earn a living.
“Warren has nothing to be ashamed of,” he said. “Ultimately, I hope that he can overcome all of this and restore his good name and integrity with the public and move on with his life.”