Archives For Georgia

James R. Patterson Jr., a real estate investor, plead guilty for his role in bid-rigging and fraud conspiracies committed at public real estate foreclosure auctions in Georgia.  Patterson admitted that he agreed with other real estate investors to rig auctions of foreclosed homes in Gwinnett County from May 2007 until at least November 2011.  According to court documents filed in the U.S. District Court for the Northern District of Georgia, Patterson and his co-conspirators agreed not to compete for the purchase of selected foreclosed homes so that they could win the auctions for those homes with artificially low bids.  The winning bidders then paid off the conspirators who had refrained from bidding against them.  As a result, conspirators profited from money that otherwise would have gone to mortgage holders and other secured debt holders and in some cases, to the people who owned the foreclosed homes.

Twenty-two defendants have been charged in connection with the Justice Department’s ongoing investigation into bid rigging and fraudulent schemes involving real estate foreclosure auctions in the Atlanta area.  Twenty of those have either pleaded guilty or agreed to plead guilty.

These charges have been filed as a result of the ongoing investigation being conducted by the Antitrust Division’s Washington Criminal II Section, the FBI’s Atlanta Division and the U.S. Attorney’s Office of the Northern District of Georgia, in connection with the president’s Financial Fraud Enforcement Task Force.

Jackie Williams, 42, Bishop, Georgia, was sentenced to serve 70 months in Federal prison for wire fraud by the Honorable C. Ashley Royal, United States District Judge, in Athens, Georgia.  Ms. Williams was also ordered to pay restitution in the amount of $563,097.01.

Williams pled guilty to the charge on March 16, 2016.  As part of her guilty plea, Williams admitted to orchestrating a real estate fraud scheme which victimized several people in the Athens, Georgia area.  Williams admitted to defrauding investors from 2012-2014; specifically, she induced people to invest in a purported real estate business, claiming that she bought distressed homes and sold them for a substantial profit.  However, in numerous cases Williams never purchased the home that she told her victims she had used their money to buy, and she created falsified documents, such as fake purchase contracts and mortgage preapproval letters, to perpetuate her fraud.  In fact, Williams used her investors’ money for her own personal gain, and/or to pay off portions of the money she had borrowed from previous investors.  As part of her guilty plea, Williams admitted that she owes $563,097.01 in restitution to eight victims.

Noting that the 70-month sentence imposed was greater than the usual range of 33 to 41 months for a fraud of this magnitude, United States Attorney G. F. “Pete” Peterman, III, stated that, “It is particularly disturbing that Ms. Williams’ fraud in this case was against many older or retired victims who invested substantial portions of their savings which, even with the restitution order entered today, they are unlikely to ever recover.  If for no other reason, this office is particularly pleased that the Court chose to impose a harsher sentence than what the federal sentencing guidelines typically recommend.”

G. F. “Pete” Peterman, III, United States Attorney for the Middle District of Georgia, made the announcement. The case was investigated by the Federal Bureau of Investigation and the Sheriff’s Offices for Barrow, Madison and Oconee Counties.  Assistant United States Attorney Peter Leary handled the prosecution for the Government.

Jeffrey Wayne Brock, David Wallace “Chuck” Doughty, and Stanley Ralph Sullivan, real estate investors, pleaded guilty today for their roles in bid-rigging and fraud conspiracies committed at public real estate foreclosure auctions in Georgia.  Each admitted that they agreed to rig auctions of foreclosed homes in Cobb County from June 2007 until January 2012.  According to court documents filed in the U.S. District Court for the Northern District of Georgia, Brock, Doughty, Sullivan and their co-conspirators agreed not to compete for the purchase of selected foreclosed homes so that they could win the auctions for those homes with artificially low bids.  The winning bidders then made payoffs to conspirators who had refrained from bidding against them.  As a result, conspirators profited from money that otherwise would have gone to mortgage holders and other secured debt holders, and in some cases, to the owners of foreclosed homes.

These defendants conspired to corrupt foreclosure auctions that should have benefited lenders and homeowners,” said Principal Deputy Assistant Attorney General Renata Hesse, head of the Justice Department’s Antitrust Division.  “The Antitrust Division will continue to work with our colleagues at the FBI to pursue those who took advantage of disruption caused by the financial crisis to line their own pockets.”

Foreclosure auction fraud in Georgia remains a focus for the FBI investigators and federal prosecutors within the Antitrust Division of the U.S. Department of Justice,” said Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Division.  “By the very nature of this criminal act, the bank, and more importantly, the home owner in financial distress, are the victims that these federal laws were created to protect. The FBI will continue to provide investigative assets toward these matters in order to keep the level playing field that the law intended regarding these auctions.”

Twenty defendants have been charged in connection with the department’s ongoing investigation into bid rigging and fraudulent schemes involving real estate foreclosure auctions in the Atlanta area.  Eighteen of those have either pleaded guilty or agree to plead guilty.

The charges were filed as a result of the ongoing investigation being conducted by the Antitrust Division’s Washington Criminal II Section, the FBI’s Atlanta Division and the U.S. Attorney’s Office of the Northern District of Georgia, in connection with the president’s Financial Fraud Enforcement Task Force.

Michael Stock, Georgia, and Jon Stovall Jr. Georgia, both of whom are real estate investors, pleaded guilty today for their roles in bid-rigging and fraud conspiracies committed at public real estate foreclosure auctions in Georgia.  Each admitted that they agreed with other real estate investors to refrain from bidding against one another at public real estate foreclosure auctions in exchange for payoffs.  Stock admitted to participating in the conspiracy in Fulton and DeKalb counties from as early as August 2009 until at least November 2011, and Stovall admitted to participating in Fulton County from as early as October 2008 until at least January 2012.  Additionally, Stock and Stovall admitted to conspiring to use the mail to carry out a scheme to defraud homeowners and mortgage holders.

According to court documents filed  in the U.S. District Court for the Northern District of Georgia, the conspirators agreed not to compete against each other at public real estate foreclosure auctions, artificially suppressed the prices of properties sold at these auctions, and made and received payoffs from each other.  As a result, the conspirators seized money that otherwise would have gone to pay off the mortgage and other secured debt holders, and, in some cases, to the previous owner of the foreclosed home.

These defendants conspired to take money that rightfully belonged to homeowners and lenders,” said Principal Deputy Assistant Attorney General Renata Hesse, head of the Justice Department’s Antitrust Division.  “Those homeowners and lenders have a right to expect that the properties will be sold in free and competitive auctions.  The Antitrust Division will continue to partner with our colleagues at the FBI to aggressively pursue conduct designed to disrupt that process.”

Foreclosure auction fraud in Georgia remains a focus for the FBI investigators and federal prosecutors within the Antitrust Division of the U.S. Department of Justice.  By the very nature of this criminal act, the bank, and more importantly, the home owner in financial distress, are the victims that these federal laws were created to protect. The FBI will continue to provide investigative assets toward these matters in order to keep the level playing field that the law intended regarding these auctions.”

Including the individuals pleading, 20 defendants have been charged in connection with the department’s ongoing investigation into bid rigging and fraudulent schemes involving real estate foreclosure auctions in the Atlanta area.  Eighteen of those have either pleaded guilty or agreed to plead guilty.

These charges have been filed as a result of the ongoing investigation being conducted by the Antitrust Division’s Washington Criminal II Section, the FBI’s Atlanta Division and the U.S. Attorney’s Office of the Northern District of Georgia, in connection with the president’s Financial Fraud Enforcement Task Force.

Nathan E. Hardwick IV, 50, formerly of Atlanta, Georgia, and Asha R. Maurya, 40, Atlanta, Georgia, were indicted on charges of with conspiracy, wire fraud, and related crimes in connection with Hardwick’s alleged theft of over $20 million from the attorney escrow accounts and operating accounts of Morris Hardwick Schneider and LandCastle Title, an Atlanta-based law firm and title agency in which Hardwick and Maurya once served as top executives.  In addition to charges against Maurya for assisting with Hardwick’s theft, the indictment also charges Maurya with stealing approximately $900,000 from the firm’s accounts to pay her own personal expenses. Continue Reading…

Angelo Alleca, 46, Buffalo, New York, and Mark Morrow, 54, Cincinnati, Ohio, were arraigned on charges of orchestrating a multi-million dollar investment fraud scheme.  The Defendants marketed several funds that were supposed to invest in certain assets/investments, such as hedge funds managed by a professional money manager of mortgage debt.  According to the new indictment, they instead used the money to pay redemptions to earlier investors, to acquire and operate several businesses, and to pay personal expenses.

According to U.S. Attorney John Horn, the indictment, and other information presented in court: From on or about 2004 until 2012,  Alleca acted as the President and Chief Operating Officer of Summit Wealth Management, an investment adviser headquartered in Atlanta, Georgia. During that time, Alleca started several funds and falsely misrepresented that money would be invested in hedge funds and debt securities and managed by professional investment managers. Continue Reading…

ChieduGeorge” Chukwuka , 47, Stone Mountain, Georgia, was sentenced to serve nine years in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $5,868,243.80 in connection with his lead role in a mortgage fraud ring that spanned five years and caused millions in losses.  Chukwuka, along with his co-defendants and other co-conspirators, engaged in a massive property-flipping scheme resulting in over $5.8 million in actual losses to financial institutions between 2006 and 2011. Chukwuka pled guilty to conspiracy to commit wire fraud on August 10, 2015.

“At the height of the recent mortgage-fraud crisis, this property-flipping scheme caused scores of homes to fall into foreclosure, costing financial institutions millions of dollars in losses,” said U. S. Attorney John Horn.  “Many communities in our district have been decimated by mortgage fraud during the last 15 years and even now struggle to recover from the effects of these schemes.”

According to U.S.A. Horn, the charges and other information presented in court:  Chukwuka, along with his co-defendants and co-conspirators, recruited straw buyers to purchase homes at a discounted price, typically a bank-owned or distressed property.  The group then recruited a second straw buyer to purchase the same home at a dramatically inflated price. In turn, Chukwuka, his co-defendants and co-conspirators applied for an acquisition loan for the second straw buyer, supporting the loan application with false income, fake employment, and fraudulent net worth data.

The group profited from their scheme by pocketing the acquisition loan proceeds paid by the victim bank to the straw seller (who was the straw purchaser in the first transaction). The amount of profit was the difference between the price paid by the straw purchaser in the first transaction and the price paid by the straw purchaser in the second transaction, less transaction costs.  Since none of the straw purchasers made any significant loan payments, the targeted properties usually went into foreclosure, resulting in over $5.8 million in actual losses to financial institutions between 2006 and 2011.

The sentencing of Mr. Chukwuka brings to a close a lengthy investigation and prosecution of a criminal enterprise that targeted the banking industry through their prolific mortgage fraud schemes.  Mr. Chukwuka, considered by law enforcement and prosecution to be head of this enterprise, caused extensive damage with high loss amounts to those victim banks involved.  The FBI is pleased with the role it played in bringing about this sentencing to federal prison of Mr. Chukwuka as well as the previous sentencings of his co-defendants in this matter,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.

The following five defendants also pleaded guilty for their roles in the scheme, and were previously sentenced as follows:

  • Shelly Gee, a/k/a Shelly Baker, 48, Atlanta, Georgia, was sentenced on November 10, 2015, to one year, six months in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $2,243,909.99. Gee pled guilty on June 17, 2015.
  • Sandra Petgrave, 43, Stone Mountain, Georgia, was sentenced on December 4, 2015, to one year, six months in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $1,051,970.77. Petgrave pled guilty on August 18, 2015.
  • Kennedy Simmonds, 54, Snellville, Georgia, was sentenced on December 17, 2015, to three years, ten months in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $5,868,243.80. Simmonds pled guilty on July 6, 2015.
  • Marcelle Welch, 37, Stone Mountain, Georgia, was sentenced on December 17, 2015, to two years, three months in prison, followed by three years of supervised release, and ordered to pay restitution in the amount of $2,554,189.25. Welch pled guilty on July 29, 2015.
  • Leah Freeman, 43, Atlanta, Georgia, was sentenced on December 17, 2015, to two years in prison, to be followed by three years of supervised release, and ordered to pay restitution in the amount of $1,828.532.94. Freeman pled guilty on June 19, 2015.

The defendants were sentenced by U.S. District Court Judge Timothy C. Batten, Sr.

In a related case, Chinedum Oli, 42, Snellville, Georgia, was sentenced on February 19, 2013, by Senior U.S. District Court Judge Marvin H. Shoob to five years in prison, followed by five years of supervised release, and ordered to pay restitution in the amount of $4,373,281.63. Oli pled guilty on October 9, 2012.

The cases were investigated by the Federal Bureau of Investigation.

Assistant United States Attorneys Jamie L. Mickelson and Steven D. Grimberg prosecuted the cases.

 

Gary Patton Hall Jr., 49, Tifton, Georgia, the former president and Chief Executive Officer of Tifton Banking Company (from August 2005 to June 2010) pled guilty to one count of conspiracy to commit bank fraud and one count of conspiracy to commit fraud against the United States in connection with his role in a bank fraud scheme in which he hid underperforming and at-risk loans from the bank and the FDIC.

According to facts stipulated in the plea agreement, while president and Chief Executive Officer of TBC, Mr. Hall was engaged in an ongoing scheme to mislead the bank and its loan committee about loans TBC made to local individuals and businesses.   As part of the scheme, Mr. Hall hid past due loans from the FDIC and the TBC loan committee, which resulted in the bank continuing to approve and renew delinquent loans and loans for which the collateral was lacking.   Several of the borrowers eventually defaulted on the loans, resulting in millions of dollars in losses to TBC and others. Continue Reading…

Following a three and a half week jury trial in Albany, Georgia, Elbert Walker, Jr. a/k/a “Shula”, Cairo, Georgia, was convicted of conspiracy to commit arson and mail, wire, bank and bankruptcy fraud and false declarations to a court as well as several firearms offenses.  Darryl Burk, Cairo, Georgia, was convicted of conspiracy to commit mail fraud.  Shirley Burk, Cairo, Georgia, was convicted of conspiracy to commit arson, mail fraud and false declarations to a court.  The jury deliberated just over one day before returning the verdicts.  Senior United States District Court Judge W. Louis Sands presided over the trial.  Continue Reading…

Trent Gaines, a Georgia real estate investor, pleaded guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia.  Gaines admitted that he and others conspired not to bid against one another at public real estate foreclosure auctions from October 2008 to November 2010 in Fulton County, Georgia, and from September 2006 to February 2011 in DeKalb County, Georgia. Gaines also admitted to conspiring with others to use the mail to carry out a scheme to fraudulently acquire title to selected Fulton and DeKalb properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that should have gone to mortgage holders and others. The selected properties were then awarded to the conspirators who submitted the highest bids in private side auctions open only to Gaines and his co-conspirators. Continue Reading…