Michael Lock’s Milwaukee…..Part IV: Mortgage Game
Written by Urban Mogul Life on August 13, 2010
Fourth of five parts
Michael Lock orchestrated a mortgage fraud that cost banks millions of dollars, destroyed people’s finances and heaped misery on Milwaukee’s already battered inner-city neighborhoods.
And he did much of it while out on work release from a Wisconsin prison.
Lock even managed to run his scams from behind bars using a prison phone.
It was yet another example of how Lock outsmarted the criminal justice system for a decade while building one of Milwaukee’s biggest crime organizations.
He executed more than $2 million in mortgage fraud with an assembly line of liars, each positioned at a key step in the home-buying process.
Chelsie Woodley, Lock’s loan processor at his Bayside office, witnessed the fraud firsthand.
She saw loan after loan come in with phony paperwork, fake incomes, bogus rental histories and forged bank records. Lock and his crew were literally making up people.
“This is federal time,” she told Lock. She then walked away from the operation.
Seasoned in real estate
Mortgage fraud came naturally to Lock.
He owned a home-repair firm that he used as a money-laundering front for his illegitimate businesses. He had started buying property a decade earlier, building a portfolio of 50 houses scattered across the northern half of the city.
He owned dumps and middle-class homes, some that he poured money into and lived in himself.
Lock’s crime operations generated huge cash profits – profits whose sources needed to be hidden. He used seemingly legitimate businesses to explain where all the money came from.
But Lock saw the chance to make more money by converting legitimate businesses into criminal enterprises.
Years of running his outfit with minimum resistance from law enforcement had taught him that he could get away with it.
Authorities did bust Lock in 2002 trying to sell 9 ounces of cocaine. He agreed to become an informant in exchange for a light sentence.
He served less than a year in a traditional prison and the rest at a minimum-security correctional facility in Milwaukee. He was out on work release during the day and spent his nights at the Marshall E. Sherrer Correctional Center.
Lock got a job at Andrea Nembhard’s real estate company on W. Silver Spring Drive.
Nembhard knew Lock from an earlier real estate deal. She had arranged for him to buy the house at 4900 W. Fiebrantz Ave., where Lock’s crew later killed at least two drug dealers and buried them in the backyard.
Nembhard thought Lock was trustworthy because he and his grandfather were pastors. She wanted him to do clerical work and cleaning.
Prison officials told Nembhard that Lock couldn’t have personal visits or phone calls and couldn’t handle money.
That was fine with Nembhard. She didn’t have grand plans for him. Lock’s main jobs were to answer the phone, cut the grass and keep the place tidy.
But she left Lock alone in the office a lot. And Lock took advantage of that time to do all the things he wasn’t supposed to do.
Lock probably never should have been placed at such a job. Prisoners participating in the program are typically sent to jobs where they can be watched more closely, such as a factory or a warehouse.
Nembhard never had had a prisoner working for her before. She said she did the best she could.
“He was cheap. It was a lucrative arrangement for me because I was out and about,” Nembhard said. “I can’t watch this man like a baby sitter. Come on. My office was not a prison cell.”
Lock spent several months working for Nembhard, fine-tuning his mortgage fraud operation.
Once he got out of prison in mid-2005, he stepped it up.
First, he landed a state loan originator’s license. Lock knew the state prohibited anyone convicted of a “crime of dishonesty” from holding such a license.
But drug dealing didn’t count in the eyes of the state.
Lock opened World Financial Mortgage on the North Shore. He and his girlfriend, Shalanda Mason, moved into a home in nearby Mequon. Mason worked as a prostitute for Lock for years, prosecutors say.
Jerhonda McCray, alreadyin the mortgage business, became Lock’s partner. He also started sleeping with her.
Lock’s team started by hunting for naïve buyers with good credit scores. He boosted their financial profiles by hiring a counterfeiter to make phony bank records and wage statements.
Then they looked for houses, the more broken down the better. It was easier to use a home in inner-city Milwaukee because it wasn’t worth much and Lock’s crew could write up inflated appraisals.
McCray applied for loans from out-of-town banks that wouldn’t question the appraisal. At the closings, Lock took a big cut of the mortgage money for himself.
Lock charmed the young female buyers he targeted.
He told them he would collect the rent, fix up the homes and sell them for a quick profit – all promises he failed to keep.
Lock once called himself a credit pimp. He was using the women’s credit rating instead of their bodies.
When the buyers couldn’t make their mortgage payments, several ended up in bankruptcy with an anchor of debt around their necks.
Monique Bowen was a typical case.
She was a 24-year-old college student with a part-time job in 2005. Lock told her he knew someone selling foreclosed homes and gave her the pitch: Bowen would buy them. Lock would fix them up and sell them a few months later. She would get $5,000 per house.
Bowen signed up to buy five. She saw photos of the run-down houses but figured she wouldn’t have them under her name for long.
Weeks after the last closing, Bowen started getting letters from banks about late mortgage payments. And the City of Milwaukee demanded she fix code violations.
The banks sued Bowen and the houses were taken. Her credit was destroyed. And Lock, who made $74,000 off fraudulent mortgages in her name, wouldn’t take her calls.
Out on the town
Out of prison and raking in thousands on his mortgage scam, Lock began to relax – and show his face in public. In the summer of 2005, he went with friends to Jazz in the Park at Cathedral Square.
Milwaukee police Officer Dean Newport happened to be there that Thursday night.
Newport had tracked Lock for years but wrote him off after he was busted with cocaine by federal agents. He couldn’t believe Lock was free.
“How the hell did he get out?” Newport wondered.
At the park, Newport took photos of Lock talking on his cell phone. It was a violation for a convicted drug dealer to have a phone. Lock went back on Newport’s list of suspects to watch.
Newport was still a police officer. He had passed on taking the detective’s test. Most expected him to go that way because of his knack for bigger cases. But Newport wanted to stay on days. New detectives have to work nights.
He made it to the detective bureau as an officer. He was doing what he always wanted: working major cases.
Newport loved working with his sources. He was hearing from them that a mercenary group kidnapped and tortured drug dealers in Milwaukee. They called themselves the “Body Snatchers.”
Newport had known of Lock for six years. But he didn’t realize Lock ran the Body Snatchers.
Then Lock got cocky and made his biggest professional mistake.
He decided to sell the house on Fiebrantz, where two bodies were buried under pit bull kennels in the backyard. He sold the property despite a warning from one of his top lieutenants, Donald “Killer Coop” Cooper, that he should never sell the house.
But Lock saw quick profit.
He sold the house to Stacie Happel, making about $70,000 off the deal. Lock might have figured he could control Happel, who worked on mortgage deals in his Bayside office.
What he didn’t figure was that Happel’s boyfriend would smash up the concrete slabs in the backyard and find the remains of one of Lock’s victims. The boyfriend ran across the street to the fire station to report what he had found.
In that instant, Lock’s crime network began to crack.
Lock said recently he would be stupid to sell a house with bodies in the yard.
“That’s like the world’s dumbest criminal,” he said.
Empire begins to crumble
Days after the bodies were found, Lock was thrown in jail for a series of probation violations.
He lied about his income and had moved without permission. His probation agent didn’t even know where he lived.
The bodies in the yard of a house he once owned weren’t enough to put him away for good. Investigators needed evidence linking Lock to the murders.
With his release date approaching, probation officialsran out of options. They had to let him go.
They asked police if they really want a convicted drug dealer suspected in a couple of murders released.
Stay Tuned For the final installment on Monday Aug 16th
The cops were silent. Lock had to be released. It looked like he might beat the system again.
But Newport, his old nemesis, had a new weapon: Lock’s eyeball man, Louis Jackson, had flipped and was willing to secretly record his boss.