George Admits to Scheme involving $34M in Loans
Gordon George, a mortgage broker in Charlotte, South Carolina, agreed to plead guilty to federal charges including conspiracy and mail fraud in connection with his role in flip scheme that operated in Mecklenberg County, North Carolina between July 2001 and February 2004. Most of the properties in the scheme were sold through KenBill Properties, a real estate investment company. There have been several guilty pleas in connection with this scheme.
According to the criminal information filed in connection with the plea agreement, between July 2001 and February 2004, in Mecklenberg County, North Carolina, (primarily Cornelius and south Charlotte) George recruited individuals to apply for home mortgages by promising that he would assist the recruit in renting the home bought with the loan proceeds and later selling it at a profit. George did not explain that he has arranged for inflated appraisals so that lenders would issue loans exceeding the true market value of the properties. The loans were arranged for approval based on false information as to the borrowerâ€™s income, employment and intent to occupy the home as their primary residence. George and his co-conspirators used the proceeds of the loans to pay a lesser price for the homes than the amount to which they were being sold to the recruits. The excess money was distributed between the conspirators and cash was sometimes given to the recruited buyer at closing. Some of the excess proceeds were typically used to make payments on the loan, keeping the new loan out of default. George and his co-conspirators did not assist the buyers in renting out the over-valued homes and many of the loans went into default. A total of $34 million in loans were involved in the scheme, resulting in approximately $7 Million in fraudulently obtained proceeds diverted to George and his conspirators.