‘I’m not a criminal’ says woman who paid for Beazer’s sins

Even her husband hasn’t seen it.

Janette Parker is so embarrassed by the electronic ankle bracelet locked around her right leg that she wears long pants, dresses in private and slips beneath the bedcovers before allowing her closest confidante, the man she married 29 years ago, to enter their room.

“Who wears an ankle bracelet?” Parker asked and she began to cry. She paused to compose herself, then answered her own question: “A criminal.”

“In my mind,” she said, “I’m not a criminal.”

Six years after a scandal enveloped Beazer Homes USA over its reckless loan practices, costing millions of dollars and forcing hundreds of foreclosures, Parker is the only employee from the company’s mortgage unit to be charged with a crime.

To put that in perspective: Janette Parker, a mother of two with a high school education, was the only person criminally charged with mishandling loans for one of the Fortune 500 companies at the heart of the nation’s financial crisis.

Out of the dozens of executives and thousands of employees, Parker wants to know: “Why me? How me?”

Parker, 49, managed the Beazer Mortgage office for seven years in Charlotte, N.C. She understands what Beazer did was wrong. What she did was wrong. She pleaded guilty to three counts of mortgage fraud and was sentenced in October to five years of probation and a year of house arrest and ordered to repay $837,025 in restitution.

She is not contesting her guilt. But with the government’s investigation now closed, Parker questions why she was singled out to become the public face of mortgage fraud while powerful executives avoided criminal prosecution. Even a federal judge asked why.

Beazer Homes and two top executives escaped prosecution by paying back millions of dollars. A third executive was convicted of securities fraud, but has asked for a new trial.

In the subsidiary loan operation, where most of the irregularities occurred, only Janette Parker was indicted. Prosecuting Parker, said attorney Tricia Derr, is comparable to charging a clerk at Target because the sales tax was computed wrong: Parker did what her bosses trained her to do.

“She’s so far down the chain,” Derr said. “She’s a nobody. She’s not the CEO. She didn’t come up with the idea. The person who came up with the plan to go around (federal) guidelines, that’s the person responsible.”

Parker initially said she was too scared to talk with the Charlotte Observer. It was the newspaper’s investigation in 2007 that led to the federal probe of Beazer and eventually to the charges against her. But Derr said it’s important for the public to understand the results of the government’s investigation.

Like other companies, Beazer was taking advantage of loan guarantees provided by the federal government to promote home ownership to firsttime and lower-income buyers. In the past, many of those applicants had been considered too risky.

But the Federal Housing Administration guaranteed that if a borrower defaulted, it would cover the mortgage payment — and it was increasingly

willing to gamble on risky borrowers. Lenders and home builders had little to lose.

Parker said she was taught how to process government-backed mortgages during a PowerPoint presentation in Miami: “If the buyer needed additional money — say the sales price was $105,000 and they needed a $3,000 down payment — then you would add that to the sales price. Anybody that did government loans did it the same way.”

Parker said she assumed the practice was legal because her bosses trained her, and it was standard practice within the company. “Did I learn it? Sure, I learned it — the Beazer way.”

Beazer enticed buyers into signing for larger loans than they could afford.

Some families did not have money for a down payment despite an FHA requirement that borrowers pay at least 3 percent of the sales price. It’s against the law for a company to give money for a down payment directly to a homeowner because the gift could be construed as an inducement to buy a home.

In Charlotte, the Observer discovered, Beazer helped provide many down payments.

Beazer would donate the exact amount of the down payment to a charity, plus a $300 fee. The charity would then give the homebuyer the money as a gift. That was legal at the time. But Beazer went one step further in some cases and increased home prices to recoup its donations. That was illegal.

It meant buyers were overpaying, increasing the chances of default. The government, which guaranteed the loans, was on the hook. In March 2007, the FBI, the U. S. Department of Housing and Urban Development, and the IRS launched a criminal investigation.

That same month, Parker said she was promoted to regional vice president over six Beazer Mortgages offices in the Carolinas and Tennessee. Now she wonders if she was set up to take the fall. Despite her promotion, she said she reported to the same bosses.

Attorney Eben Rawls, who represented Parker on criminal charges and declined to comment, said in court: “… It certainly put her at the top of the chain with the bull’s eye on her back.”

A few months later, without warning, Parker said Beazer placed her on administrative leave.

“It was a Monday. To this day I don’t wear the outfit I wore that day or the jewelry. They told me to turn in my keys. I asked, ‘ What’s going on?’ and they said, ‘I can’t tell you any more than that.’ “

The company later closed Beazer Mortgage, fired an undisclosed number of employees including Parker, and announced that it would stop building homes in Charlotte.

Parker was indicted four years later in September 2011.

WHAT HAPPENED TO BEAZER AND EXECS?

Beazer Homes, an Atlanta-based homebuilder, admitted in 2009 it was responsible for “criminal acts of its former employees” and shut down its subsidiary, Beazer Mortgage. Beazer agreed to pay up to $50 million into a restitution fund for victimized home buyers over five years — provided the company recovered financially.

As of March 31, Beazer had paid $16.6 million and some analysts pre- dict Beazer will never pay the full amount. The company lost $145 million in the fiscal year ending Sept 30, 2012, and another $40 million in the next six months. As of Sept. 30, the company had 804 employees, down from as many as 4,578 in 2005.

Ian McCarthy, former chef executive officer of Beazer Homes, repaid $6.5 million in bonuses and stock profits, but admitted no wrongdoing. Three months later, in June 2011, Beazer’s board ousted McCarthy and gave him a $5.2 million exit package.

James O’Leary, chief financial officer of Beazer Homes, reimbursed more than $1.4 million. He left Beazer in March 2007 for a job with Kaydon Corp., where he is chairman, president and chief executive

Michael Rand, Beazer Homes’s former chief accounting officer, was convicted of falsifying profits in publicly reported financial statements and — after being notified about the federal investigation — of trying to cover up the fraud by deleting nearly 10,000 emails. He faces 125 years in prison and has asked for a new trial.

Ron Kuhn, president of Beazer Mortgage, who hired Parker, is a mortgage broker in Arizona. “It’s probably not in anybody’s best interest to dig that one back up,” Kuhn said when contacted by the Charlotte Observer. “Janette did some wrong things and got punished for it, and that’s the bad news.”

Rudy Perdomo, vice president of Beazer Mortgage and Parker’s immediate boss, is listed on LinkedIn as a consultant at Mortgage Professional in Atlanta.