David Saks: FORMAL MAYORAL CANDIDATE SENTENCED FOR FRAUD - INFLATED SALES PRICE KICKBACK SCHEME

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

FORMAL MAYORAL CANDIDATE SENTENCED FOR FRAUD - INFLATED SALES PRICE KICKBACK SCHEME

Former Mayoral Candidate Sentenced for Kickbacks

H. Gregory Cordell, 46, Cartersville, Georgia, was sentenced by United States District Judge Charles A. Pannell, Jr. to federal prison for bank fraud related to a mortgage he obtained on property located in Cartersville, Georgia.

Cordell was sentenced to 2 years, 3 months in prison to be followed by 5 years of supervised release, and was ordered to pay $1,005,804.20 in restitution.  Cordell was convicted of these charges on November 30, 2011, after pleading guilty to bank fraud.

According to the charges and other information presented in court:  In March 2003, Cordell, a real estate agent and real estate developer, bought a house and six acres of land at 179 Old Mill Road, Cartersville, Georgia, for $1.25 million.  Although the seller had listed the property for approximately $950,000, Cordell and the seller agreed to inflate the sales price by $307,000, obtain an inflated mortgage from Washington Mutual, and then pay the extra $307,000 to Cordell after closing.  This kickback arrangement was not disclosed to the bank.  In his loan application, Cordell also overstated his annual income, claimed that he owned several properties that he no longer owned, and understated his financial liabilities.

Cordell refinanced the property in August 2004.  He obtained a mortgage from Washington Mutual for $1 million and drew out $62,500 in equity.  His mortgage application contained the same false claims about income and assets as his original application.

On the evening of September 1, 2004, the house was destroyed by arson as Cordell and his family were driving to Florida for a vacation.  Because of the timing of the fire, he never made a payment on the new mortgage.  Cordell's property insurer paid off the mortgage to avoid the accrual of interest while it investigated the arson.  With the mortgage lien lifted, Cordell sold the property in October 2005 for $900,000 and spent the proceeds without paying any to the insurer.  Including the kickback, refinance, and sale amounts, Cordell thus pocketed about $1.26 million from the Old Mill property.  Cordell's purchases during this time period included a private airplane, a Porsche, two Suburbans, two Mercedes Benz SUVs, and other vehicles.

In an earlier civil case tried in federal court in Rome, Georgia, the property insurer obtained a judgment against Cordell for over $1 million for the amount it paid to Washington Mutual to satisfy the mortgage.  In August 2008, Cordell was indicted on state arson, insurance fraud, and loan fraud charges.  That case remains pending in Bartow County Superior Court.

This case was investigated by Special Agents of the Federal Bureau of Investigation.

Assistant United States Attorneys William G. Traynor and Stephen H. McClain prosecuted the case.

United States Attorney Sally Quillian Yates said of the case, "Mortgage fraud involving fraudulently inflated sales prices contributed to the housing bubble that, when it burst, caused so much damage to the economy in Georgia and across our nation.  This defendant not only lied on mortgage applications to get over $1 million in loans, he fraudulently inflated the purchase price to get a bigger mortgage and then was paid a kickback under the table from the proceeds.  He will now spend over two years in federal prison."

 

Brian D. Lamkin, Special Agent in Charge, FBI Atlanta Field Office, stated: "The defendant, through his fraudulent actions and, later, his extravagant purchases of airplanes and luxury vehicles, exhibited a selfish greed that he will now have to answer for.  The FBI will continue its efforts to ensure that individuals such as Mr. Cordell, who engage in bank fraud schemes of this type, are identified, investigated, and brought forward for prosecution."

Courtesy M ortgage Fraud Blog




David Saks



Time&Temp Memphis

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Comment balloon 2 commentsDavid Saks • February 22 2012 07:30AM

Comments

Wow, this guy was very shifty.  I wonder how he planned on getting away with such overt actions.  Justice has been served!

Posted by Ron Cooks, Texas Real Estate, Ft Hood/Killeen Homes for Sale (The Real Estate Marketplace) over 8 years ago

You never know who the next swindler will be, Ron. Once they gain the public's trust they'll take the money and run till they're nabbed.

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

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