CHARLOTTE REAL ESTATE LOAN BROKER SENTENCED
ON THREE MORTGAGE FRAUD–RELATED COUNTS

Broker Gets Six Years for Involvement in Mortgage Fraud Scheme

CHARLOTTE, NC - GORDON GEORGE, 37, a licensed real estate loan broker from Charlotte was sentenced Thursday in federal court on charges related to his participation in a mortgage fraud scheme, announced U.S. Attorney for the Western District of North Carolina Gretchen C.F. Shappert. GEORGE entered his guilty plea in September 2005. U.S. District Judge Richard L. Voorhees sentenced Gordon George to 65 months (five years and five months) in federal prison on Thursday, October 26, 2006.

GEORGE was charged in September 2005 with three federal counts which included conspiracy, mail fraud, and money laundering conspiracy. GEORGE entered a guilty plea to the charges and agreed to cooperate in the government’s ongoing investigation. GEORGE admitted that he participated in a criminal conspiracy to defraud numerous home mortgage lenders located throughout the United States. According to official court documents, GEORGE accomplished this by recruiting individuals to apply for home mortgage loans with promises that he would assist the recruit in renting the home bought with the loan proceeds, and in later selling it at a profit. GEORGE further assisted them by supplying inflated appraisal reports to the lenders. According to information presented to the court, GEORGE and his co-conspirators fraudulently obtained proceeds from the scheme of approximately $7 million.

GEORGE and his co-conspirators typically did not explain to these recruits that the conspirators had arranged for inflated appraisals on the subject properties so that lenders would issue loans far exceeding the true market value of the property. GEORGE and others conspired so that loans would be approved on the basis of statements they knew to be false as to material matters, such as the buyer’s personal income, employment history, and intent to occupy the home as their primary residence. GEORGE and his co-conspirators used the proceeds of the fraudulently obtained home mortgage loan to pay a different, lesser price for the home. The conspirators distributed the excess money from the loans between themselves, and they sometimes gave the recruited buyer a cash sum at the real estate closing. The conspirators and/or the buyer typically used some of the excess money to promote and conceal the scheme by keeping the new loan and other, similarly conceived loans, out of default.

“Mr. George’s conviction and sentence show that mortgage loan professionals who choose to participate in fraudulent transactions risk far more than a commission–they risk a felony conviction, imprisonment, and the loss of their personal assets,” stated Gretchen C.F. Shappert, United States Attorney for the Western District of North Carolina. To date, the U.S. Attorney’s Office, with its partners in the mortgage fraud task force, which includes the FBI, have convicted 18 mortgage brokers, seven real estate attorneys, four builders, three real estate agents, and two real estate appraisers.

Federal sentences are served without the possibility of parole. The case was investigated and prepared by the Federal Bureau of Investigation and was handled for the government by Assistant United States Attorney Craig Randall.

Status information regarding co-conspirators of Gordon George:

Amy Phillips - Guilty Plea entered 11/22/05 - Awaiting Sentencing
Keith Sutton - Guilty Plea entered 6/30/05 - Awaiting sentencing on 11/8/06
Michael Alexander - Guilty Plea entered 10/19/05 - Awaiting sentencing
F. Bryant Brown - Guilty Plea entered 12/8/05 - Awaiting sentencing
Hillis Haygood - Guilty Plea entered 7/18/06 - Awaiting sentencing