Former Louisville Lawyer Charged with Misappropriating Monies from Trust and Estate

LOUISVILLE, KY—Candace G. Hill, Acting United States Attorney for the Western District of Kentucky, announced today that an Information has been filed in the United States Court for the Western District of Kentucky, Louisville Division, charging Wavy Curtis Shain, age 26, of Louisville, Kentucky, with nine counts of wire fraud, and one count of bank fraud.

According to the allegations contained in the Information, Shain used businesses he owned and operated, Derby City Title and Capital Distribution, LLC, to perpetrate fraudulent schemes on various lending institutions and mortgage companies. The schemes perpetrated by Shain included misappropriating substantial amounts of loan proceeds received by him on behalf of borrowers using Derby City Title to obtain loans to purchase homes, and, by doing so, failing to pay off existing loans and mortgage held by the sellers of those houses. Additionally, Shain is charged with preparing false and fraudulent notes and mortgages purportedly associated with the purchase of houses and selling these instruments to willing buyers. Lastly, Shain is charged in the Information with perpetrating a check kiting scheme using business and personal accounts maintained with US Bank and BB&T Bank.

In the event of a conviction, the maximum potential penalties are 150 years’ imprisonment, a $3,250,000 fine, and supervised release for a period of 5 years.

The case is being prosecuted by Assistant United States Attorney James R. Lesousky, Jr., and it was investigated by the Federal Bureau of Investigation and the Office of the Kentucky Attorney General, Consumer Protection Division.

Shain is scheduled to appear for arraignment on April 21, 2009, at 9:30 a.m., in United States District Court in Louisville, Kentucky.

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The charge of a person by Information is an accusation only and that person is presumed innocent until and unless proven guilty.