Jury Finds Alvin Man Guilty on Multiple Bank Fraud Charges
|U.S. Attorney’s Office October 30, 2012|
HOUSTON—A federal jury has convicted Patrick Cody Morgan, 45, of Alvin, of conspiracy to commit bank fraud and nine counts of bank fraud, United States Attorney Kenneth Magidson announced today. Just moment ago, the jury returned its verdicts after two days of trial and less than three hours of deliberation.
The government presented evidence at trial that from July 2004 and continuing through September 2007, Morgan, along with his co-conspirators, participated in a scheme to defraud financial institutions insured by the Federal Deposit Insurance Corporation (FDIC) and residential mortgage lenders. Morgan would locate condominium units in the Houston area from a builder or developer. He would then set up trust accounts with names similar to the condominiums through which the title to pass. Co-defendants would recruit individuals, also known as straw buyers, with good credit to act as borrowers in applications for residential mortgage loans to purchase one or more of the properties, which would ultimately go into foreclosure because of the failure to pay the loans.
Within the overall scheme, there were approximately 100 properties with a loan amount of more than $39 million. The loss amount was determined to be more than $20 million.
Morgan chose to represent himself at trial, but the court appointed counsel to be available if Morgan had questions or needed assistance. Morgan responded to inquiries by the judge, throughout various hearings, with arguments that he was not subject to the jurisdiction or laws of the United States. Testimony in trial revealed these actions are part of the sovereign citizen movement.
U.S. District Judge Lynn N. Hughes, who presided over the trial, has set sentencing for February 4, 2013, at which time he faces up to 30 years in prison on each count and a $1 million fine. Originally released on bond, Morgan’s pre-trial release was revoked after the court found he had violated a condition of his release by failing to appear for his court setting. He will remain in custody pending his sentencing.
Co-defendants John Elias, 44; Reginald Anderson, 41; Viktor Ly , 43; Minh Vu, 41; and Christopher Pearson, 34, all of Houston, previously pleaded guilty to conspiracy to commit bank fraud and will be sentenced in January 2013.
The case was investigated by the Internal Revenue Service-Criminal Investigation and the FBI and is being prosecuted by Assistant U.S. Attorneys Jennifer Lowery and Carolyn Ferko.