A superseding indictment was filed in the case of US v. Lucas, the Hattiesburg, Mississippi mortgage fraud case that resulted in the indictment of ten people earlier this year.

The superseding indictment names one new defendant – Kenneth Fairley, Jr. who is alleged in the indictment to have acted as a nominal buyer for the purpose of obtaining mortgage loans for the purchase of property. Media sources indicate that Kenneth Fairley, Jr. and his brother and co-defendant, William Vaston Fairley the sons of the Rev. Kenneth Fairley, senior pastor of Mount Carmel Baptist Church and a Hattiesburg political activist.

Those charged in the original indictment and named in the superseding indictment are:

• Richard B. Lucas, alleged to be the controlling person for Lucas Development and Investments and its affiliates including C&J Properties, Southwest Trust Co., the Mellon Group, Lucas & Castle Properties and the Auto Marketing Group

• Phillip N. Weary, alleged to have been an employee of Lucas Development or its affiliates

• Kimberly Castle, Mississippi lawyer alleged to have handled real estate settlements for Lucas

• Kenneth Stalnaker, real estate appraiser doing business as Accurate Appraisals

• Loretta Joy Champ, real estate appraiser doing business as J&J Appraisal Services

• William V. Fairley aka Vaston, alleged to have been an employee of Lucas Development or its affiliates

• Jafus Jones Jr. , alleged to have been an employee of Lucas Development or its affiliates

• Kristy N. Packer, alleged to have been an employee of Lucas Development or its affiliates and a straw buyer

The superseding indictment charges all of the defendants with one count of bank fraud, one count of bank and wire fraud conspiracy and nine counts of wire fraud. Lucas, Castle and Weary were also charged with money laundering conspiracy.

Malcolm C. Clark, alleged in the original indictment to have been an employee of Lucas Development or its affiliates and Marcy R. Irby, alleged in the original indictment to have acted as a straw buyer, both pled guilty earlier this year and neither is named in the superseding indictment.

The superseding indictment alleges:

From December 2000 through November 2002, Lucas, Weary, William Vaston Fairley, Jones and others acquired distressed properties in Hattiesburg and Laurel, Mississippi and elsewhere. Lucas arranged to produced inflated appraisals for properties acquired in the names of Weary, William Vaston Fairley and Jones. Stalnaker, Champ and others prepared inflated appraisals. William Vaston Fairley, Kenneth Fairley, Jr., Packer and others submitted false mortgage loan applications to finance their purchase of properties from Weary. Lucas and Jones would recruit purported investors to acquire properties from Weary and others knowing that the investors would not be required to make any down payments. Lucas and Jones represented to potential investors that Lucas Development or its affiliates would lease the houses to tenants, collect the rents, make the monthly mortgage payments and handle all maintenance and repairs. Lucas caused mortgage loan applications to be made on behalf of the investors and on behalf of the nominal buyers, Packer and Kenneth Fairley, Jr., which falsely represented the income and assets of the borrower.

Castle would conduct the real estate closings knowing that the borrowers routinely did not make the down payment reflected on the settlement statement. Lucas would prove funds due from borrowers at settlement.

The indictment identifies transactions involving loan proceeds of almost $600,000.