David Saks: Attorney Gets 4-Year Jail Sentence in $6 Million Mortgage Fraud Scheme

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Attorney Gets 4-Year Jail Sentence in $6 Million Mortgage Fraud Scheme

Sevierville Attorney Receives Four-Year Sentence for Wire and Bank Fraud Conspiracy and Money Laundering in $6 Million Mortgage Fraud Scheme

U.S. Attorney’s Office June 06, 2013
  • Eastern District of Tennessee (865) 545-4167
 

KNOXVILLE—Jerry Kerley, 60, of Kodak, Tennessee, was sentenced on June 6, 2013, by the Honorable Thomas W. Phillips, U.S. District Court Judge, to serve four years in prison for his May 2012 federal convictions for wire fraud, bank fraud, and money laundering, all arising from a mortgage fraud scheme.

The indictment charged Kerley and Jeffrey Whaley with conspiring to defraud Citizens Bank, located in New Tazewell, Tennessee, and SunTrust Mortgage Inc., located in Richmond, Virginia, through a mortgage fraud scheme.

The indictment alleged that the conspiracy involved a “straw borrower” mortgage fraud scheme in which straw borrowers were induced to obtain mortgage loans in their names based on promises that they would not have to make a down payment or mortgage payments for the property, would receive cash at closing, and would share in the profit following a resale of the property.

The indictment further alleged that it was part of the conspiracy that materially false representations were made to Citizens Bank and SunTrust Mortgage, which, among other things, included false representations related to the straw borrowers’ source of funds for down payments and amounts recorded as “cash from borrower” on HUD-1 Settlement Statements and loan applications for the purpose of inducing Citizens Bank and SunTrust Mortgage to disburse the mortgage loan proceeds it had wired to and entrusted with Kerley’s title company Guaranty Land Title.

The indictment specifically alleged eight real estate transactions in which Kerley and Whaley concealed from Citizens Bank and SunTrust Mortgage that the borrower did not provide at closing the money identified as the cash from borrower on the HUD-1 Settlement Statement.

According to the indictment, in those eight transactions, Citizens Bank and SunTrust Mortgage, in total, wired more than $6 million in loan proceeds to Guaranty Land Title Company for disbursement.

The indictment alleged that Kerley, a Tennessee licensed attorney, was the owner of Guaranty Land Title Company where the fraudulent loans were closed.

The indictment also alleged that Whaley conducted business through a company known as GBO Enterprises which received substantial sums of money from the loan proceeds.

The indictment also alleged that Kerley and Whaley committed money laundering offenses through financial transactions that involved proceeds from the mortgage fraud scheme.

Whaley is scheduled to be sentenced in U.S. District Court on July 1, 2013.

This investigation was conducted jointly by the Internal Revenue Service-Criminal Investigation, Federal Bureau of Investigation, and the United States Secret Service. Assistant U.S. Attorneys Trey Hamilton and Zac Bolitho represented the United States.

source: FBI



David Saks



Time&Temp Memphis

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Comment balloon 0 commentsDavid Saks • June 07 2013 12:03PM

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