Man Admits Condo Investment Scheme
According to the informations filed against Swann and Stinson, those two men decided in 2005 to try to build The Falls project in Edmond. The next year, Swann, Stinson and others at their direction began soliciting private investors for money to develop The Falls. Swann and Stinson acquired investor proceeds for The Falls based on false information and then used those proceeds for personal expenses and repayment of earlier investors.
According to the informations, individuals invested more than $5 million into The Falls based on promises that the monies would be spent for engineering, architectural, and infrastructure costs. Rather than paying for those expenses, Swann and Stinson used investor proceeds to pay for golf and entertainment expenses at a private Oklahoma City golf club, to lease BMW cars for The Falls’ officers and their spouses, and to repay earlier investors who had been promised repayment. The Falls project was never completed.
On February 28, 2011, Swann pled guilty to one count of money laundering. At the plea hearing, Swann admitted that he helped to convince a Texas investor to wire $255,000 to a local bank for the Edmond project. Swann further admitted that after receiving those funds, he transferred the money to another account and used some of those funds for purposes not disclosed to the investor. On July 6, 2011, Stinson pled guilty to conspiracy to commit securities fraud, in connection with raising investor proceeds for The Falls based on false information.
On February 4, 2011, VanHoose pled guilty to conspiring to make false statements to Citizens Bank of Edmond for a $50,000 personal loan in his name. Linn pled guilty to conspiring to make false statements to Citizens Bank for the same loan. According to the Informations filed against VanHoose and Linn, the financial statements presented to the local bank for VanHoose exaggerated his assets and net worth. At VanHoose’s plea hearing, he admitted that he conspired with Swann and Linn to get a $50,000 personal loan in his name from a local bank. VanHoose later diverted most of the loan proceeds, without the bank’s knowledge, to The Falls project.
Swann faces up to 10 years in prison and a $250,000 fine for the money laundering count. Stinson, Linn, and VanHoose each face up to five years in prison and a fine up to $250,000 for the conspiracy counts. Each defendant will also be required to pay restitution to victims. Sentencing for VanHoose is set for September 7, 2011. Sentencing for the other three defendants has not been set.
Sanford C. Coats, United States Attorney for the Western District of Oklahoma, announced the guilty plea.
These cases were investigated by the Federal Bureau of Investigation, the United States Secret Service, and the Criminal Investigation Division of the Internal Revenue Service. The cases are being prosecuted by Assistant U.S. Attorneys Chris M. Stephens and Nick Lillard.
Courtesy Mortgage Fraud Blog