Realtors reach agreement with U.S. Department of Justice

78053744Jana DeWitt and Kenneth Westfall, licensed real estate agents operating in Colorado Springs, paid the United States $93,500 in civil penalties to settle allegations that they engaged in deceptive conduct, violating the Financial Institutions Reform Recovery and Enforcement Act.

According to the U.S. Department of Justice, DeWitt engaged in fraud in at least 17 bank-owned properties, by falsely listing her daughters as the buyers, in order to conceal the fact that DeWitt herself was the real party in interest, DOJ spokesman Jeff Dorschner said in a news release.

DeWitt’s employing broker, Westfall, was the listing agent for each of these transactions, Dorschner said.

“Westfall had a responsibility, and in some cases a duty based on the language of the listing contracts used in the transactions, to disclose to the sellers that the real party in interest purchasing the property was affiliated with him and his company,” Dorschner said.

“But he did not do so, despite the fact that he knew that Ms. DeWitt, his employee, was the real party in interest purchasing the properties.”

To facilitate each of these transactions, DeWitt wired money from her accounts to the closing company as the purchase funds for the transaction.

She allegedly falsified her own bank account statements to make them appear that the account was held in the name of her daughters, thus providing the seller with proof of funds for purchase, while concealing that she was the real party in interest.

For each of these transactions, Westfall knowingly failed to notify the seller that DeWitt was the real party in interest purchasing the property and that DeWitt was affiliated with him and his company.

The investigation leading to the settlement was conducted in conjunction with the FBI.

Assistant U.S. Attorney Jamie Mendelson handled this matter on behalf of the government.

The settlement agreement is neither an admission of liability by DeWitt or Westfall, nor a concession by the United States that its claims are not well founded, Dorschner said in the release.

 

3 Responses to Realtors reach agreement with U.S. Department of Justice

  1. Does the law only require that a RE agent/agency DISCLOSE that the buyer is a RE agent or agency? Seems to me the law should actually prohibit RE agents or agencies from making such purchases altogether – especially en masse as DeWitt seems to have done. RE firms could buy up all the distressed homes on the market, and in effect, push the rest of us out. I saw a lot of RE agents purchasing foreclosed homes in Phoenix a few years ago when I was trying to get into that market. All the decent homes in decent areas were snatched up by RE agents and flipped. It was like real estate insider trading . . .

    Ellen
    January 6, 2014 at 2:32 pm

  2. They both should lose their licenses for at least 5-10 years, nothing less and she should never be able to become a broker again. they have cheated banks, buyers and other realtor offices as well as many agents in Colorado Springs in this scam….. I hope banks and other companies sue them for this scam. $93,000 is to cheap for Westfall and Dewitt, jail time would have been better……crooks

    Gary
    January 6, 2014 at 3:29 pm

  3. I was so surprised when I read this article. My story is as follows: I was losing my home and Westfall was the agent that fronted WellsFargo. Wellsfargo would only re-negotiate my loan at the $540,000 full market rate even though it was appraised at $420,000. I was served a notice to vacate my home, which I did. I left my home in tip top condition and turned the keys over to Westfall. He then placed his realestate sign in the yard. Within no time the house sold for only $380,000. I was so shocked that it was sold for such a low price especially after I requested to re-negotiate my loan at the appraised value of $420,000. Then within no time the same house sold again at a higher rate well over $380,000. I think it sold for $420,000, I am not sure on that price and will now try to investigate that. It was all so confusing to me. Once again I want to mention that Westfall was the broker that was handeling my house for Wellsfargo. I am now wondering if I was a victim of Westfall violating the Financial Institutions Reform Recovery and Enforcement Act? Is there anyone who can steer me in a correct direction to get more answers?

    Rebekah
    January 7, 2014 at 1:20 pm