David Saks: Real Estate Developer Gets 5 Years in $6 Million Mortgage Fraud

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Real Estate Developer Gets 5 Years in $6 Million Mortgage Fraud

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

U.S. Attorney’s Office July 01, 2013
  • Eastern District of Tennessee (865) 545-4167
 

KNOXVILLE, TN—Jeffrey Whaley, 49, of Sevierville, Tennessee, was sentenced on July 1, 2013, by the Honorable Thomas W. Phillips, U.S. District Court Judge, to serve five years in prison for his May 2012 federal convictions for wire fraud, bank fraud, and money laundering, all arising from a mortgage fraud scheme.

Whaley’s sentencing today followed his co-defendant and Sevierville title attorney Jerry Kerley’s four-year sentence imposed on June 6, 2013.

Whaley and Kerley were convicted of conspiring to defraud Citizens Bank, located in New Tazewell, Tennessee, and SunTrust Mortgage Inc., located in Richmond, Virginia, through a mortgage fraud scheme.

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.

As part of the conspiracy, 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.

Kerley and Whaley concealed eight real estate transactions 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. 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.

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

Whaley conducted business through a company known as GBO Enterprises, which received substantial sums of money from the loan proceeds.

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

“These defendants were licensed professionals, one a real estate agent and the other an attorney. They not only had a duty to obey federal law but had a professional duty to their respective professions. They have violated the trust of their clients and unlawfully deprived the victims of their hard-earned money. Their incarceration is notice to all that this fraudulent conduct will not be condoned,” said U.S. Attorney Bill Killian.

This investigation was conducted jointly by the Internal Revenue Service-Criminal Investigation, Federal Bureau of Investigation, and 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 2 commentsDavid Saks • July 02 2013 07:36AM

Comments

Crime does pay but thankfully someone is watching

Posted by Hannah Williams, Expertise NE Philadelphia & Bucks 215-953-8818 (Re/Max Eastern inc.) over 6 years ago

So right, Hannah.

Posted by David Saks ((retired)) over 6 years ago

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