Defendants in Mortgage Fraud Scheme Sentenced

Defendants in Mortgage Fraud Scheme Sentenced

by Kim Powell

NewsWest 9

MIDLAND - After eight and a half years of scheming, three years of federal investigations, and $45 million in bank loans, the case is finally coming to a close. 

All four defendants were sentenced in federal court on Wednesday in front of a packed courtroom full of their friends and family who sent in hundreds of letters to prosecutors. 

"That's one of the things that makes this different, is just the number of people and the prominence of some of the people that were friends of these defendants," Assistant U.S. Attorney Austin Berry said. "But it doesn't change the fact that this was a crime and we needed to make sure that they were brought to justice."

Between 2003 and 2011, Stephen Hilliard and Michael Cowan would purchase properties using their own investment companies and then re-sold them at a much higher price to another one of their own companies. That's where Cynthia Hirsch, and Odessa real estate broker, with the help of Berta McFaddin, came in and created a Broker's Price Opinion to support the inflated prices.

"The volume of documents in this case exceeded 100,000 written documents, and electronic data was measured in multiple terabytes that the FBI had to analyze and review and make decisions about where it fit into the case. It was a tremendous puzzle that had to be pieced together."

All four gave tearful apologies in front of the court. Both Hilliard and Cowan were sentenced to three years in prison, plus four years of probation. McFaddin, who was the first to take the plea agreement, will spend one year and one day behind bars.

Despite the efforts of the U.S. Attorney, the judge issued Hirsch to five years of probation and no jail time. During sentencing, Hirsch asked for leniency since her husband--a criminal defense attorney in Odessa--is struggling with his health.

Still, prosecutors say they were satisfied with the judge's decision in the case.

On top of the prison time, Cowan and Hilliard owe the government one million dollars, and Hirsch will owe $100,000. Hilliard will also have to give up property he obtained through the mortgage fraud scheme.