David Saks: COMM/RES DEVELOPMENT SWINDLER WILL SPEND 40 MONTHS IN FEDERAL PRISON

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

COMM/RES DEVELOPMENT SWINDLER WILL SPEND 40 MONTHS IN FEDERAL PRISON

Norman Man to Serve 40 Months in Prison and Pay $4.3 Million in Restitution in Connection with Edmond Condominium Project

U.S. Attorney’s Office December 28, 2011
  • Western District of Oklahoma (405) 553-8700
 
OKLAHOMA CITY—DEREK CHRISTOPHER SWANN, 39, of Norman, was sentenced yesterday to serve 40 months in federal prison for money laundering related to a failed Edmond commercial and residential development called “The Falls,” announced Sanford C. Coats, United States Attorney for the Western District of Oklahoma. Earlier this year, Giovanni Bryan Stinson, 38, of Edmond, pled guilty to conspiracy to commit securities fraud, in connection with raising investor proceeds for The Falls based on false information.

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, or 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 to repay earlier investors.

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.

Today, United States District Judge David L. Russell sentenced Swann to 40 months in federal prison, followed by three years of supervised release. Swann was also ordered to pay $4,334,900.01 in restitution to more than two dozen investor victims.

Earlier this year, Shawn Patrick Linn, 42, of Edmond, and Mark A. VanHoose, 32, of Edmond, pled guilty to federal conspiracy charges in connection with financing for The Falls. Both were sentenced to terms of probation and ordered to pay more than $40,000 in restitution to a local bank. Sentencing for Stinson has not been set.

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 FBI



David Saks



Time&Temp Memphis

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Comment balloon 3 commentsDavid Saks • December 29 2011 05:50PM

Comments

Unless these individuals, don't get sentenced to do some serious time, there will be slowing down this disease.

Posted by Joe Petrowsky, Your Mortgage Consultant for Life (Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709) almost 8 years ago

Looks like previous commenter was trying to say they needed to do serious time -- and he and I agree that 40 months is not serious enough for what this guy did - though the other 3 years of supervised release may be helpful -- if it means he won't be playing in the financial fields during that time.   It is nice to see he has to pay $4,334,900.01in restitution.

Posted by Steven Cook (No Longer Processing Mortgages.) almost 8 years ago

Joe, Steve, thanks for reading this entry and your thoughts. I've read of quite a few instances of developers using cookie-cutter tactics like this case. Their temptation to embezzle, comingle funds and misappropriate the escrow or project reserve is too great for them and overcomes the convention of wisdom. Lives are ruined.

Posted by David Saks ((retired)) almost 8 years ago

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