Entries in Tennessee (33)

3:08PM

Gainesboro Real Estate Investor Sentenced in Bank Fraud Case

IRS Website Records

On October 21, 2003, in Nashville, TN, Joyce C. “Joy” Hall was sentenced to serve 70 months in prison followed by three years of supervised release. Hall was ordered to pay $571,496.81 in restitution.  In July 2003, a jury convicted Hall on 22 counts of conspiracy, bank fraud, and money laundering.  Testimony during Hall’s trial established that Hall, a real estate investor, Birdwell, a former vice-president of the Citizens Bank of Gainesboro, and others conspired to buy, sell and transfer property with the intent to defraud Citizens Bank. Hall participated in the scheme by placing pieces of property in the names of people other than that of the true owner in order to conceal the true ownership of the property. 

Some of the people in whose names the pieces of property were placed had no knowledge their names were being used for that purpose.  The proof also established Hall participated in the scheme by falsifying the qualifications of people seeking to borrow money from Citizens Bank to purchase real estate from or through Hall by fraudulently increasing their income and/or the value of their assets.  The proof established Hall received money or the benefit from a number of the loans which were made based upon the false information or false names provided to the Bank.

7:55PM

BRENTWOOD TN ATTORNEY CHARGED WITH WIRE FRAUD

US DOJ Press Release — March 7, 2003

Nashville, Tennessee - March 7, 2003 - James K. Vines, United States Attorney for the Middle District of Tennessee, announced that a criminal information has been filed in federal court against Williamson County attorney Patricia Spicer Carden . Carden, whose license to practice law had previously been suspended by the Tennessee Board of Professional Responsibility, is charged with two counts of wire fraud for allegedly defrauding several mortgage lending institutions involved in the refinancing of residential properties.

The information alleges that, despite having her license suspended, Carden continued to hold herself out as a practicing attorney and acted as the settlement agent on the loans. It is further alleged that instead of receiving the loan proceeds which had been wire transferred to her account to satisfy the first mortgage, Carden instead utilized these funds for her own personal use and benefit, and used a portion of the loan proceeds to make periodic payments on first mortgages in order to conceal and continue the fraudulent scheme.

7:42PM

Grand Jury returns indictments in flipping scheme

US DOJ Press Release - December 18, 2002

MEMPHIS, TN - Terrell L. Harris, United States Attorney for the Western District of Tennessee, announced today that former Memphis real estate agent Dwan Brown, his wife Venesia Brown, and Brown’s brother, Ossie Glasper have been indicted by a Federal Grand Jury in the Western District of Tennessee. The first count of the indictment charges that beginning in July 1997, and continuing until May 1998, the Browns and Glasper conspired with Tilma Ann Baker and other persons not identified in the indictment to violate federal mail, wire and bank fraud statutes.

According to the indictment Glasper, doing business as Bitmore Investments, and acting at the direction of the Browns, purchased duplex properties for fair market value. Glasper then “flipped” the properties to the Browns for approximately twice fair market value. The Browns, using false appraisals prepared by Baker, and leases and rent rolls which falsely overstated amounts of rental income, obtained mortgage loans to finance both transactions at the falsely and grossly inflated “flip” sales prices. According to the indictment the amounts of the loans were approximately eighty percent of the inflated “flip”sales prices. If convicted on the conspiracy charge, the defendants face a sentence of five years imprisonment and a $250,000 fine.

In connection with the scheme, Counts 2 through 39 of the indictment charge the Browns and Glasper with violations of the federal bank, mail and wire fraud statutes. Counts 40 through 62 charge defendants Dwan Brown and Glasper with wire fraud in connection with the “flip” sales of 23 properties known as the “Fairbanks properties.” The maximum penalty for a violation of each of counts 2 through 60 is 30 years imprisonment and a $1,000,000 fine.

Counts 63 through 71 charge defendant Dwan Brown with presenting false appraisals to Southern Security Federal Credit Union, Trust One Bank, and First Tennessee Bank in violation of Title 18, United States Code, Section 1014. The maximum penalty for each violation is 30 years imprisonment and a $1,000,000 fine.

Defendant Dwan Brown is also charged in connection with an unrelated scheme to defraud Trust One Bank. According to Count 72 of the indictment Trust One released its security interest in an annuity Brown pledged as collateral for a $70,000 loan. The indictment alleges that Brown falsely and fraudulently promised that if Trust One released its security interest in the annuity he would cash in the annuity and repay the loan. Brown did not repay the loan, and as a result of the scheme the indictment alleges that Trust One lost approximately $60,000. If convicted on Count 72, Brown faces a maximum penalty of 30 years imprisonment and a $1,000,000 fine.

Ms. Baker was sentenced to 22 months imprisonment on November 16, 2001, for her role in the conspiracy.

4:44PM

Memphis Real Estate Agent pleads guilty to fraud

Memphis Business Journal - September 16, 2002

Former Memphis real estate agent Kenneth A. Shaw pleaded guilty today to federal charges of conspiracy to commit fraud and tax evasion. Shaw faces a maximum eight years in prison and $350,000 in fines when he is sentenced Jan. 8, 2003, according to Terrell Harris, U.S. Attorney for the Western District of Tennessee.

According to information compiled by Harris’ office, Shaw conspired with Tilma Ann Baker and other unidentified persons in 45 real estate flipping schemes from November 1997 to May 1998 which netted him $1.4 million in consulting fees. Shaw, through a “straw” buyer, purchased duplexes for fair market value. The straw buyer then resold the properties to Shaw at greatly inflated prices, according to Harris’ office. Both transactions were financed with real estate mortgage loans in amounts that were about 80% of the “flip” sales prices.

Shaw and his co-conspirators used fraudulent loan underwriting information to justify the higher sales prices, including fraudulent appraisals prepared by Baker; false lease and rent rolls; false representations that Shaw was giving second mortgages to his straw buyer; and fraudulent HUD documents that concealed the true nature of the transactions and the fact that a portion of loan proceeds were being kicked back to Shaw in the form of consulting fees paid to K&C Investments, a company Shaw owned.

According to Harris’ office, Shaw filed a false income tax return in 1997 that reported K&C Investments had consulting fee income of $210,062 for that tax year, when K&C had actually pulled in $610,400. Baker was sentenced last year to 22 months in prison for her role in the conspiracy.

3:35PM

Attorney Indicted for misappropriating $3.7 million

US DOJ Press Release - July 24, 2002

Memphis , Tennessee - Terrell L. Harris, United States Attorney for the Western District of Tennessee, announced today that the federal grand jury returned an indictment charging Nat B. Hughes, III, with eight counts of mail fraud and wire fraud, and one count of money laundering.

The indictment charges that Nat B. Hughes , a local real estate attorney, was responsible for misappropriating $3.7 million. The indictment alleges that he was closing attorney on numerous real estate loans. In closing these loans he was responsible for the disbursement of funds received at the real estate closing, including the payoff of any existing loans which collateralized the real property.

The indictment states that Nat B. Hughes did not pay off the existing mortgage on the property being sold/refinanced, but instead retained the money for his own personal gain and benefit. Specifically, he used the money which had been set aside to pay off the existing mortgages to invest in the stock market.

The indictment alleges that he transferred these funds to his investment trading account at Daytek Online Trading in New York. The indictment provides that he defaulted on 31 loans in which he had misappropriated approximately $3.7 million.

9:09PM

Memphis Man Indicted on Fraud Charges 

US DOJ Press Release  — June 3, 2002

Memphis, TN - Terrell L. Harris, United States Attorney for the Western District of Tennessee , announced today that a federal grand jury recently returned a five-count indictment against Phillip Lacefield, of Memphis, Tennessee. Lacefield was charged with mail fraud, wire fraud, making false statements on a loan application, and two counts making false statements to a representative of the United States Pretrial Services Office.

Lacefield was previously indicted on February 28, 2002, charged with engaging in money laundering, making a false statement to a federal agency, and identity theft. That indictment also seeks a criminal forfeiture of all proceeds of the money laundering and identity theft activities. It claims that Lacefield utilized the names, driver’s license numbers, and bank account numbers of various individuals in order to commit mail fraud, bank fraud, wire fraud, and forgery.

According to the new indictment, between approximately March 21, 2002 and April 29, 2002, Lacefield devised a scheme to defraud and obtain money by means of false and fraudulent misrepresentations to a financial institution. The indictment states that Lacefield prepared fraudulent home loan applications and supporting documents and sent these documents to Tennessee Mortgage Funding in Nashville, Tennessee, which in turn faxed information to Conseco Bank, Inc., in Greensboro, North Carolina.

The indictment also alleges that Lacefield made a material false statement in connection with an application for a property improvement or equity loan with First Tennessee Bank. According to the indictment, Lacefield represented that his address had been 310 N. Avalon

Street, Memphis, Tennessee, for one year, that he had no creditors, and that he received monthly wages of $15,000 with a yearly bonus of $60,000 from Professional Business Services, Inc., when he knew these to not be true.The indictment also charges that Lacefield made false, fictitious, and fraudulent statements and representations during two of his weekly meetings with a representative of the United States Pretrial Services Office.

9:11PM

IDENTITY THEFT RING TARGET RESIDENTIAL LOANS 

US DOJ Press Release — May 1, 2002

Terrell L. Harris, United States Attorney for the Western District of Tennessee, announced today that on Wednesday, May 1, 2002, a federal grand jury in Memphis, Tennessee returned an indictment charging twenty-four individuals for their roles in an identity theft scheme which targeted Federal Housing Authority loans and down payment assistance loans from the City of Memphis, Tennessee Division of Housing and Community Development.

The indictment charges the individuals with: conspiracy to engage in making false statements and social security fraud; identity theft; making false statements; and social security fraud. The indictment alleges that the defendants utilized Employer Identification Numbers, issued by the Internal Revenue Service, as if they were social security numbers issued by the Commissioner of the Social Security Administration.

In addition, the defendants created nine digit numbers which they also used fraudulently as legitimate social security numbers. The indictment further alleges that the purpose of using the assumed social security numbers was to enable the defendants to qualify for residential mortgage loans. Twelve of the defendants were successful in obtaining the loans. Of the twelve successful defendants, eleven also qualified for down payment assistance loans from the City of Memphis Division of Housing and Community Development.

The individuals named in the indictment include: Terrell J. Green; Marcus Martin; Sandra D. Jones; Lisa Anderson; Larry Henderson; Barbara Richmond; Katrina Alexander; Uretha Smith; Shontea Lewis Sheppard; Star Lee Hall; Michelle Williams; Sherry Minor; Shirley Mosby Bryant; Robert Kelly III; Carol Macklin; Angela Warren; Sheila D. Barton; Nathan Malone; Kenneth D. Cast; Christopher Rose; Sedrick Cast; Thomas Anthony Taylor; Tanisha Jones Ward; and William H. Cast, Jr.

8:32PM

Two plead guilty to fraud charges

Elizabethton Star — April 30, 2002

GREENEVILLE — Harry S. Mattice Jr., United States Attorney for the Eastern District of Tennessee, announced that Shirley Harwood, 47 , owner of Apple Tree Mortgage , Kingsport, pleaded guilty Monday before United States District Judge Thomas G. Hull to four counts of a 12-count indictment returned in October 2001.

Specifically, Harwood pled guilty to conspiracy, mail and wire fraud, and money laundering in connection with a fraudulent scheme to broker a short-term loan. Harwood and her former employee and co-conspirator Dennis Ray Sutherland Jr ., 30, of Piney Flats, who previously pleaded to the conspiracy charge, fraudulently induced Credit Suisse of Zurich, Switzerland, to fund a $4.5 million loan to HelveStar, a Swiss company. The defendants created forged documents purportedly from Bank of America, which they provided to Credit Suisse as collateral for the loan.

In communicating with representatives of Credit Suisse, Harwood and Sutherland allegedly vouched for the authenticity of the phony documents by pretending to be Bank of America authorizing officials. The loan is currently in default for more than $4 million. Harwood received more than $200,000 in commissions for brokering the loan and rewarded Sutherland with $10,000 for his role in posing as a Bank America official.