Thursday, October 18, 2007

Mortgage Brokers Being Jailed for Fraud and Overstating Income

Two sentenced in loan scheme Vance salesmen falsified applications, Andrea Weigl, News Observer Two Vance County mobile home salesmen were sentenced Wednesday to federal prison time for a $19 million mortgage fraud scheme.

Richard D. Meador and Donald Scott Carroll were both employees of Donald Wayne Gupton, a Vance County businessman who operated several companies that state and federal agents have been investigating since at least 2003.

Prosecutors have said Gupton and his employees used a half dozen illegal means to falsify loan applications so buyers with bad credit could get loans. Ultimately, the borrowers couldn't afford the mortgages, and the banks foreclosed on the homes. Gupton, a Henderson businessman, has already pleaded guilty to federal charges and is scheduled to be sentenced next month. Gupton owned Dynasty Homes of Henderson, Superior House Center and Creative Real Estate and Manufacturing Housing Sales Center.

Meador, a manager at one of Gupton's companies, was sentenced Wednesday at the federal courthouse in New Bern to four years and five months in prison, followed by three years of probation. He was ordered to pay $1.2 million in restitution. Carroll, also a manager, was sentenced to 2 1/2 years in prison and three years of probation, and ordered to pay $1.4 million in restitution. Meador's attorney, Lewis Thompson III, said the restitution has to be paid jointly by the defendants and Gupton's companies.

Prosecutors say the scheme's tactics involved using the same mobile home as a trade-in for nine different buyers and giving money to buyers to make it appear they had down payments when they did not. Gupton's employees also created fake letters from borrowers' relatives saying they had loaned money for down payments when they had not, prosecutors say.

Carroll has cooperated with investigators since 2004, according to court filings by his defense attorney, F. Hill Allen IV, and Assistant U.S. Attorney Banu Rangarajan, who both sought a lighter sentence for Carroll. Allen said the judge did not reduce Carroll's prison sentence. "Obviously, this is a sad moment for his family and Scott," Allen said. "We certainly respect the court's decision."

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