Broker Sentenced for Submitting False Documents to Lenders

Allison Tussey —  July 14, 2010 — 3 Comments

Joshua Gervolstad, Redding, California, has been sentenced to three years in prison, ordered to pay $1.4 million restitution and will be on supervised release for two years, according to media reports. As previously reported by Mortgage Fraud Blog, Gervolstad pleaded guilty to one count of mail fraud in connection with a mortgage fraud scheme.

Gervolstad, who was a mortgage broker, submitted inflated appraisals and false lien documents for use in closing purchase transactions involving five different real properties located in Redding and in Lodi, California. The closing statement for each property contained fraudulent papers requiring the payoff of a lien to an entity called “TPG Investments.” In each case, the lien did not exist. In reality, Gervolstad controlled TPG Investments and used its bank account to divert mortgage loan funds to himself and other persons. His conduct caused $1,798,888.91 in fraudulent payouts for liens that did not exist, affecting mortgages with a total value of $5,441,562. At least three of the properties were foreclosed and were sold for a combined loss of at least $1,170,000.

Gervolstad is scheduled to be sentenced by United States District Judge William B. Shubb on December 14, 2009, at 8:30 a.m. The maximum statutory penalty for a violation of mail fraud is 20 years in prison, a $250,000 fine, and restitution of the full amount of the loss. The actual sentence, however, will be determined at the discretion of the court after consideration of the Federal Sentencing Guidelines, which take into account a number of variables and any applicable statutory sentencing factors.

This case is the product of an extensive investigation by the FBI. It is being prosecuted by Assistant United States Attorney Matthew D. Segal.

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Allison Tussey

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3 responses to Broker Sentenced for Submitting False Documents to Lenders

  1. I would like to know the type of sentence Mark j Calhoun and his daughter April Calhoun recieved for their roles in the federal mortage fraud case in Jackson Mississippi entitled Operation Malicious Mortage ?

  2. Alison Shuman July 15, 2010 at 2:08 am

    I really appreciate that someone is reporting on these topics. These guys need to be caught and prosecuted because everyone (and the real estate industry) suffers from the impact of mortgage fraud.

    Alison

  3. This is what makes lenders look bad in a bad time for real estate ;(

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