David L. Layton, builder, Raleigh, North Carolina, plead guilty to one count of conspiracy to defraud the United States in connection with a mortgage fraud scheme where new home prices were allegedly inflated to cover third party and borrower payouts. His co-defendant James Thomas Davis, entered a plea of not guilty and is scheduled for trial on June 12, 2006.

A superseding indictment filed in January of this year charged both defendants with one count of conspiracy, two counts of submitting false documents to HUD, one count of wire fraud and two counts of mail fraud.

According to the indictment, Davis operated and promoted Easy Financial Services and Eagle Investments Club AKA Eagle Investors Club, both of which purported to arrange home financing. Layton was a general contractor who built and sold houses in the Raleigh, North Carolina area. Between June 2004 and January 2006, according to the indictment, the defendants utilized false and misleading statements and omissions to trick mortgage lenders into making loans to borrowers recruited by Davis, including, the role of the borrower, the value of the home being purchase, the true amount of money received by Layton, Davis and the borrower. .

Properties identified in the indictment were:

5505 Simmons Road, Garner, North Carolina

9204 Mustard Seed Lane, Garner, North Carolina