United States Attorney Richard B. Roper
Northern District of Texas

FEDERAL INDICTMENT CHARGES
AMARILLO MAN IN MORTGAGE FRAUD SCHEME

AMARILLO, Texas — A 14-count federal indictment was unsealed today that charges Amarillo, Texas, resident, John Joseph Baumgartner with several felony offenses related to a mortgage fraud scheme he was involved in beginning in June 2006, announced U.S. Attorney Richard B. Roper of the Northern District of Texas. Baumgartner, 45, was arrested without incident yesterday morning on those charges at the Pantex Plant in Amarillo, where he is employed by the National Nuclear Security Administration. He will make his initial appearance this afternoon before U.S. Magistrate Judge Clinton E. Averitte.

Specifically, the indictment charges Baumgartner with one count of mail fraud and nine counts of wire fraud, aiding and abetting, which, upon conviction, carry a maximum statutory sentence of 20 years in prison and a $250,000 fine, per count. The indictment also charges Baumgartner with four counts of engaging in monetary transactions in property derived from specified unlawful activity and upon conviction, each of those counts carries a maximum statutory sentence of 10 years in prison and a $250,000 fine. An indictment is an accusation by a federal grand jury and a defendant is entitled to the presumption of innocence unless proven guilty.

The indictment alleges that in September 2006, Baumgartner applied for and obtained an $840,000 conventional, cash-out refinance mortgage for a property located at 1022 South Wilton Place in Los Angeles. As part of the scheme, Baumgartner falsely represented that he was purchasing the Wilton Place property as his current and primary residence. Baumgartner misrepresented his income and retirement account funds and misrepresented that he had rental property on Briarwood Drive in Amarillo that generated $1700 per month in rental income. When Baumgartner obtained the refinancing funds, he didn’t use them in the manner he represented in his application for refinancing, but instead diverted the bulk of the funds to a casino account at Caesar’s Palace in Las Vegas.

U.S. Attorney Roper praised the excellent investigative work of the Federal Bureau of Investigation and the cooperation of the U.S. Department of Energy. The case is being prosecuted by Assistant U.S. Attorney Christy Drake of the Amarillo, Texas, U.S. Attorney’s Office.

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