Loiusville Courier Journal - Oct 15 2004
A former New Albany mortgage broker pleaded guilty yesterday to fraud, money laundering, witness tampering, suborning perjury and possession of a firearm by a convicted felon.
James Scott Dewitt Cinnamon, 41 , faces a sentence of 57 to 64 months in prison under a plea agreement accepted yesterday by U.S. District Court Judge John Heyburn II in Louisville.
Cinnamon could have received 70 years in prison and a fine of up to $2.25million if convicted of the seven counts to which he pled guilty. He will not be fined under the plea agreement. The plea bargain combines two separate cases with a total of 36 criminal counts that had been filed separately by federal prosecutors in both New Albany and Louisville.
Cinnamon , who has been held in the Grayson County (Ky.) Jail since 2002, gave his prior address as the 2700 block of Lamont Road in Louisville. He was charged in the Indiana case with 16 counts each of money laundering and bank fraud in connection with mortgages through Mortgage One of Indiana , a company that he ran in New Albany from 1995 to 1999.
He was charged with closing 16 mortgage refinancing loans totaling more than $1.4million without paying off the original loans during the refinancing boom of 1999. Checks written by First Tennessee Bank to pay off the loans were instead deposited in accounts controlled by Cinnamon, according to court documents.
Clients then received payment-due notices from both First Tennessee and their prior mortgage holder on loans ranging from $32,250 to $202,700. First Tennessee eventually paid off the prior loans. Prosecutors will ask Heyburn to order Cinnamon to repay the bank, according to the plea agreement.
The fraud and money-laundering charges to which he pled guilty relate to a single loan for $56,900, but Cinnamon admitted in the plea agreement that he laundered the full $1.4million total of all 16 loans in the original indictment. The four charges from Kentucky include tampering with a witness, two counts of suborning perjury and one count of unlawful possession of a firearm by a convicted felon.
The witness tampering and perjury counts say Cinnamon got others to say falsely that they owned guns found in his home in May 2001. Cinnamon is serving a 41-month prison term for possession of a handgun by a convicted felon in connection with that case.