Four Sentenced in Mortgage Fraud Case
|U.S. Attorney’s Office December 14, 2010|
GREENVILLE, NC—The United States Attorney Office announced that in federal court yesterday three defendants were sentenced in a mortgage fraud conspiracy. The fourth man involved in the conspiracy, BRIAN KEITH CAUSEY, was sentenced today. Senior United States District Judge Malcolm J. Howard sentenced CAUSEY, 37, of Wilmington, North Carolina to 18 months' imprisonment followed by three years' supervised release. Additionally, CAUSEY forfeited $250,000. Yesterday, HORACE HANCE MAYO III, 39, of Wrightsville Beach, North Carolina, received four months' imprisonment and 120 days home detention with electronic monitoring followed by three years' supervised release; MICHAEL PAUL FLUHARTY, 33, of Little River, South Carolina, received six months' imprisonment followed by five years' supervised release and a fine of $2,000; and TYRONE FORD, 39, also of Wilmington, North Carolina, received 15 months' imprisonment followed by five years supervised release. Additionally, the Court ordered a $50,000 forfeiture against MAYO and his North Carolina mortgage broker license has been cancelled. A Criminal Information was filed on June 21, 2010. On August 12, 2010, all four defendants pled guilty to one count of conspiring to commit wire and mail fraud, in violation of Title 18, United States Code, Section 1349.
In late 1990, co-defendant Daniel Adams Rooks bought property in Columbus County, which he then subdivided and put mobile homes on each parcel. Low-income purchasers, who did not qualify for any type of government-backed mortgage, were solicited as buyers. Loan applications were prepared and submitted by CAUSEY, MAYO, FLUHARTY, and FORD with falsified and fictitious information regarding employment history, income, and other assets, along with letters of credit.
CAUSEY, who worked for Wachovia, in Wilmington, North Carolina, was responsible for falsifying information and submitting false documents in support of loan documents. The investigation revealed that as a former Loan Officer, he underwrote approximately 17 loans. After CAUSEY left his position at Wachovia, he went into the mortgage loan business with MAYO. The investigation identified MAYO as being responsible for three false and fictitious loans. FLUHARTY, a former employee of Daniel Rooks', assisted Alford Rooks with falsifying documents regarding the down payments. The investigation found that FLUHARTY was involved in five false loans. FORD recruited straw buyers; people who agreed to provide their financial information and good credit in exchange for money so that a loan could be taken out to buy one of the foreclosed mobile units. FORD, acting as a straw buyer himself, provided false and fictitious loan applications to mortgage lenders.
It was determined that during the conspiracy over 150 loans were submitted with false and fictitious information and over $6 million in loan disbursements. Only two of the loans were not foreclosed upon.
Investigation of this case was conducted by the Internal Revenue Service - Criminal Investigations and the Federal Bureau of Investigation. Assistant United States Attorney Thomas Murphy represented the government.