James F. Stovall III, 56, Roswell, Georgia, pleaded guilty in federal district court to charges of conspiracy to commit bank, mail and wire fraud, bank loan application fraud, money laundering, and wire fraud.

United States Attorney David E. Nahmias said of the case, "We unfortunately continue to see some real estate professionals, such as attorneys and appraisers, who serve as gatekeepers of the system, instead ignoring their professional duty to participate in mortgage fraud schemes. Given the well-known troubles in the mortgage industry and related financial markets, we will continue to aggressively investigate and prosecute such professionals who, out of pure greed, are willing to promote such fraud schemes in North Georgia."

As previously reported by Mortgage Fraud Blog, and according to the information presented in court: Stovall, a real estate attorney, participated in a mortgage fraud scheme involving property flips orchestrated by one of his clients, "Reti Relocation Services, Inc." From April 2000 to June 2001, Reti flipped some 50 properties in the metro Atlanta area in such subdivisions as Brookstone in Acworth, Windward and Seven Oaks in Alpharetta, and Towne Lake in Woodstock. Reti would acquire properties and on the same day resell or flip them to straw borrowers who were paid for participating in the transactions. Reti paid recruiters for locating straw borrowers, loan officers for preparing and submitting false loan applications and false qualifying documents, and appraisers for preparing fraudulent appraisals with inflated values that were submitted to lenders. Stovall closed nearly all of the same day fraudulent flips and, in doing so, failed to advise his clients, the lenders, of those flips, prepared false HUD-1 settlement statements that were submitted to the lenders, and moved the proceeds of the scheme through his escrow account and to off-shore bank accounts. The fraudulent scheme involved the submission of false qualifying information and documents through the mails and the wire transfer of scheme proceeds. In the overall scheme, financial institutions and lenders were fraudulently induced to make loans totaling over $20 million.

The indictment, details false statements and information for transactions concerning the following properties:

1510 Portmarnock Drive

5740 Preserve Circle

1029 Deer Hollow Drive

119 Kennemer Court

15410 Laurel Grove Drive

4692 Bishop Lake Road

15455 Laurel Grove Drive

300 Banyon Brook Point

535 Brightmore Downs

420 Crepe Myrtle Terrace

100 English Oak Court

360 Tree Lake Court

12425 Preserve Lane

2645 Francis Road

5825 Sunset Maple Drive

240 Holcombe Hill Lane

12373 Sunset Maple Terrace

605 Oak Farm Lane

647 Braidwood Drive

5655 Brookstone Drive

3005 Foxhall Overlook

1133 Fairwood Close

1373 Downington Lane

8460 Caney Creek Landing

6239 Braidwood Way

1588 Grandwood Trail

905 Fieldstone Way

1392 Downington View

5635 Forkwood Drive

5575 Brookgreen Drive

811 Hillcrest Lane

601 Villa Estate Lane

2015 Walnut Creek Crossing

820 Stonehaven Lane

6006 Fairlong Circle

630 Braidwood Drive

341 Ironhill Trace

622 Braidwood Pointe

5607 Forkwood Drive

1313 Benbrooke Lane

6209 Benbrooke Drive

1204 Benbrooke Court

5595 Forkwood Drive

8010 Royal Saint Georges Lane

6266 Benbrooke Way

5586 Forkwood Drive

5561 Brookgreen Drive

5580 Snowberry Drive

5607 Brookstone Drive

664 Transart Parkway

1050 Fairwood Run

1407 Coventry Court

5720 Brookstone Walk

6255 Braidwood Way

5809 Fairwood Walk

6303 Braidwood Overlook

457 Braidwood Walk

Stovall pleaded guilty to one count of conspiracy to commit bank, mail, and wire fraud, bank loan application fraud, and money laundering, and one count of wire fraud. He could receive a maximum sentence of five years in prison and a fine of up to $250,000 on each count.

Sentencing has not yet been scheduled. He will be sentenced by United States District Judge Thomas Thrash.