Archives For Tennessee

Kirk Douglas West aka Kirk R. Leipzig was charged with two counts of bank fraud by Information in the United States District Court for the Middle District of Tennessee (Nashville Division.)  The Information alleges that Leipzig inflated his income and net worth on personal financial statements and/or loan application documents submitted to Reliant Bank and submitted fraudulent or forged documents to support the misrepresentations – including a consulting agreement purporting to guarantee income of approximately $300,000 a year for multiple years, W-2 forms, a pay stub, and income tax returns.  Based on these misrepresentations, Reliant Bank disbursed two loans, the first on December 4, 2008 for $610,000 secured by 9569 Hampton Reserve Drive, Brentwood Tennessee and the second on March 1, 2010 for $1,600,000 secured by 4303 Harding Place, Nashville, Tennessee.  The information also seeks forfeiture.

Leipzig’s real estate investment success was featured in the Forbes article “Flipping for Profit” on July 8, 2008.  According to the Nashville Post, Greg Sturgeon filed a complaint in the Davidson County Chancery Court in March 2013, which was dismissed with prejudice a short time later, alleging that Leipzig, the manager of Home Equity Asset Partners, promised him a return on investment for contributing $60,000 to an East Nashville house flip and, that while Leipzig sold the home for $457,000 after purchasing it for $135,000, he had quitclaimed the property to Home Equity Asset Partners without Sturgeon’s knowledge and only returned about $40,000 of Sturgeon’s initial investment. The article also refers to other lawsuits against Leipzig, including lawsuits by two banks which claimed Leipzig failed to repay loans in 2011 and 2012.  A May 2013 article in the Nashville Post states that the City of Belle Meade filed a lawsuit against a land trust that owns a dilapidated property – the trustee of the trust being listed as under the care of Leipzig – claiming the property’s condition violated numerous codes.

Leipzig and his trust were also the subject of involuntary bankruptcy filings by creditors in 2014.

Murray O. Wilhoite, Jr., 68, Franklin, Tennessee, was convicted of three felony charges following a trial before U.S. District Court Judge Aleta A. Trauger.  The jury convicted Wilhoite of making a false statement to a bank, making a false statement in a federal bankruptcy filing, and making a false statement under oath during a bankruptcy hearing.

Evidence presented during the trial demonstrated that Wilhoite obtained a $1.2 million loan in December 2007 by pledging, as collateral, a Franklin, Tennessee property that he did not own. During trial, testimony and exhibits proved that Wilhoite knowingly misrepresented to an FDIC-insured bank that he owned certain real property that he pledged as collateral. However, as trial evidence proved, the property was owned at all relevant times by his father.

In documents signed during the closing for this loan, Wilhoite falsely represented that he was the owner and titleholder of the property, and the bank relied on his statements in permitting him to obtain a loan using the Franklin property as collateral in lieu of a down payment.  Wilhoite subsequently lied during a 2011 bankruptcy filing, by again misrepresenting that he owned the Franklin property, and did so for the purpose of preventing the bank from foreclosing on this property after he defaulted on his loan. Wilhoite lied again at a 2013 hearing before the U.S. Bankruptcy Court for the Middle District of Tennessee, during which he perjured himself by falsely stating that he had not known that the Franklin property was designated as collateral for the loan. The evidence at trial proved that Wilhoite made the bankruptcy-related false statements knowingly and with the intent to deceive.

Wilhoite faces up to 30 years in prison and a fine of up to $1,000,000 on the false statement to a bank charge, and up to 5 years in prison and fines of up to $250,000 on the other charges. Wilhoite will be sentenced by Judge Trauger on September 23, 2016. The sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and applicable federal statutes.

The conviction was announced by announced United States Attorney David Rivera.  The case was investigated by the Federal Bureau of Investigation and the Office of the United States Trustee. The case is being prosecuted by Assistant U.S. Attorneys Sandra G. Moses and William F. Abely.

Garry Christopher Forsythe, 42, Hendersonville, Tennessee, was sentenced to 33 months in prison to be followed by two years of supervised release and ordered to pay $2,249,294.80 in restitution and to forfeit the proceeds of his crime.

Forysthe pleaded guilty to one count of wire fraud in December 2015 in connection with a scheme involving escrow funds held by his real estate closing company, Forsythe Title and Escrow. During the sentencing hearing, evidence established that the company’s escrow accounts developed shortages of more than $2.2 million because Forsythe made inflated or unsupported transfers of funds from the escrow accounts to the company’s operating accounts. Testimony during the hearing also established that, contrary to Forsythe’s position, the escrow shortages were not inadvertently caused by the failure to deposit checks or by bank errors. The evidence demonstrated that, in one instance, funds were transferred from an escrow account at Forsythe Title & Escrow and used for the down payment on a boat purchased by Forsythe.  Evidence also demonstrated that the escrow shortages resulted in bounced checks, delays in scheduled real estate closings, and instances in which borrowers were left with two mortgages because Forsythe Title & Escrow failed to pay financial institutions with funds that had been provided for that purpose.

U.S. District Court Judge Aleta A. Trauger imposed the sentence and it was announced by David Rivera, U.S. Attorney for the Middle District of Tennessee.  The case was investigated by the FBI and the IRS-Criminal Investigation. The case was prosecuted by Assistant U.S. Attorneys William F. Abely and Cecil W. VanDevender.

Ray M. Mubarak, 56, Knoxville, Tennessee, was sentenced to serve 57 months in prison for conducting a scheme to defraud financial institutions and engaging in an unlawful monetary transaction with fraudulently-obtained loan proceeds.  He was also ordered to pay $1,993,938.44 in restitution to three banks and a title insurance company that lost money as a result of the scheme.

Mubarak pleaded guilty in May 2015 to federal charges stemming from his scheme to defraud multiple banks into loaning him over $6 million. He submitted false tax returns and personal financial statements which grossly inflated his income and net worth in order to qualify for the loans. Mubarak also admitted to defrauding the banks by causing them to rely on a fraudulent title opinion letter and forged loan closing documents and deeds.

The trial for Mubarak’s co-defendants, Dianna Mubarak and Blythe Bond Sanders, III, is scheduled for March 1, 2016.

Marbarak was sentenced by the Honorable Pamela L. Reeves, U.S. District Judge.  The investigation was conducted by the Internal Revenue Service – Criminal Investigation and Federal Bureau of Investigation.  The investigation and prosecution of Mubarak was coordinated with the Office of the District Attorney General, 6th Judicial District.  Matthew T. Morris, Assistant U.S. Attorney, represented the United States.

Clifford Elliot Ryan, 29, Chicago, Illinois, was charged in two separate indictments in Tennessee in connection with forgery to obtain a real estate license.  During the course of the investigation, agents from the Tennessee Bureau of Investigation developed information that on two different occasions, Ryan hired two different individuals to submit their fingerprints as his so he could obtain a Tennessee real estate license. The investigation additionally revealed Ryan believed prior arrests on his record would prevent him from passing the background check necessary for obtaining a license.

In January, the Wilson County Grand Jury returned indictments for Ryan, a former resident of Tennessee, charging him with one count of Criminal Simulation and one count of Forgery/Passing a Forged Instrument in Wilson County, Tennessee. In March, the Davidson County Grand Jury returned indictments, charging Ryan with one count of Fabrication of Evidence, one count of Attempted Fabrication of Evidence, and one count of Criminal Simulation.

Grady Wayne Fricks, 65, Nashville, Tennessee, pleaded guilty to conspiracy charges arising out of a scheme to defraud Cornerstone Community Bank, Dalton, Georgia, using false appraisals, settlement statements and misrepresentations to qualify for more than a million dollars in loans.

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Ray M. Mubarak, 55, Knoxville, Tennessee, pleaded guilty on May 18, 2015, in the U.S. District Court for the Eastern District of Tennessee, Knoxville, to conspiracy to commit bank fraud, bank fraud, and engaging in an unlawful monetary transaction with bank fraud proceeds.

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Ray M. Mubarak, 54, Knoxville, Tennessee, Dianna Mubarak, 52, Knoxville, and Blythe Bond Sanders, III, 35, Norris, Tennessee, were arrested by federal agents for allegedly participated in a bank fraud conspiracy involving fraudulent loans exceeding $6.7 million.

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Jayesh Dahyabhai Patel, 49, Knoxville, Tennessee, was sentenced on Jan. 15, 2015, by the Honorable Leon Jordan, U.S. District Court Judge, to serve 42 months in federal prison. Patel was also ordered to pay restitution of $2,806,438.20 to First Community Bank and serve five years of supervised release upon his release from prison.

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Paulynn Wright, 42, Knoxville, Tennessee, pleaded guilty on July 29, 2014, in U.S. District Court for the Eastern District of Tennessee at Knoxville, to conspiracy to commit wire fraud. Wright admitted conspiring to obtain a mortgage loan by providing false information to a lender.

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