Chesapeake Woman Charged with Committing Foreclosure Rescue Fraud


NORFOLK, VA – June 30, 2011 – (RealEstateRama) — Kathleen Harps, 51, of Chesapeake, Va., was arrested by the Federal Bureau of Investigation today after a federal grand jury indicted her on June 21, 2011 on one count of conspiracy to commit mail and wire fraud, three counts of mail fraud, and three counts of engaging in unlawful monetary transactions.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, made the announcement. Harps faces a maximum penalty of twenty years in jail for each of the conspiracy and mail fraud counts and ten years in jail for each of the unlawful monetary transaction counts.

According to the indictment, during 2006 Harps operated the New Beginnings Group in Hampton Roads specializing in “foreclosure rescue.” In conjunction with this business, Harps and others solicited homeowners in financial distress and facing foreclosure, to agree to sell their homes to Harps or other buyers that she located. Harps promised the homeowners that, during a one year period after the sale that they could remain in their homes without having to pay the mortgage, while simultaneously putting their financial house back in order, so that they could buy back their homes at the end of the year. This, however, failed to occur. Instead, the indictment charges that Harps and other property buyers made assorted false statements to fraudulently obtain mortgage loans, upon which they later defaulted. As a result, foreclosures soon followed and the homeowners not only lost their homes, but also lost substantial sums of equity that they had built up in their homes, which they paid to Harps’ business.

This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Robert J. Krask is prosecuting the case on behalf of the United States.

Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at or on


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