Closing Attorney Sentenced for Using Trust Account to Fund Down Payments

Allison Tussey —  June 27, 2013 — Leave a comment

Kelvin Leonard Davis, 42, Birmingham, Alabama, a former real estate lawyer, was sentenced by U.S. District Judge Karon O. Bowdre to two years in prison for wire fraud in connection with a mortgage fraud scheme that exceeded $1 million.

The defendant pleaded guilty in February 2013 to four counts of wire fraud for knowingly submitting false mortgage documents and statements to various lenders in order to obtain approval for mortgage loans. At the time of the fraudulent transactions, from October 2007 to January 2012, Davis served as the closing attorney on each of the fraudulent loan transactions.

As part of Davis‘ plea agreement with the government, he agreed to forfeit $269,335 to the government as proceeds of the illegal activity. Judge Bowdre ordered that forfeiture as part of Davis’ sentence.

According to the plea agreement, Davis carried out his fraud as follows:

He submitted false statements with loan documents in order to obtain approval for mortgage loans that would, otherwise, not have been approved. In many instances, Davis, while serving as closing attorney, would use his trust account to provide money to the borrower when a mortgage loan was closing. Davis would recover the money by subtracting the amount he provided from the proceeds he issued to the seller. Davis also would assess the seller a fee, ranging from $1,000 to $6,000, and make checks for the fee payable to Peaceful Valley Homes, a corporation he had formed.

Total losses to the various lenders as a result of Davis‘ fraud exceeded $1 million.

U.S. Attorney Joyce White Vance announced the sentence.

The FBI and the Department of Housing and Urban Development, Office of Inspector General, investigated the case. Assistant U.S. Attorney Robin Beardsley Mark prosecuted the case.

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