Attorney and Real Estate Developers Sentenced in Wilmington-Area Mortgage Fraud Case
GREENVILLE—United States Attorney Thomas G. Walker announces that today Senior United States District Judge Malcolm J. Howard sentenced numerous participants in a Wilmington area mortgage fraud scheme to prison. Senior Judge Howard also collectively ordered more than $1 Million in restitution judgments against the defendants. Those sentenced by the Court included a real estate closing attorney, two developers, and another conspirator.
United States Attorney Thomas G. Walker stated, “This is the second time within a month that courts of this district have sent attorneys and other real estate professionals to prison for mortgage fraud. Through these and other prosecutions the message should be absolutely clear. If you commit mortgage fraud, you will face time in prison.”
“Mortgage fraud is an incredibly destructive crime, where borrowers are burdened with bad loans, lenders incur significant losses, and neighborhoods are often destroyed through abandoned homes and rapidly declining property values” said Thomas J. Holloman, III, Special Agent in Charge, IRS Criminal Investigation, “Today’s sentencing of these defendants, delivers the message that we along with our law enforcement partners will not stand by idly while criminals enrich themselves, through victimizing others.”
The sentencings in Greenville today involved four participants in the Wilmington-area mortgage fraud scheme, including developer JUSTIN LEE ROOKS, 33, of Loris, South Carolina; developer MICHAEL THOMAS BARTLETT, 48, of Myrtle Beach, South Carolina; closing attorney ROBERT HAROLD MELVILLE, JR., 52, of Lake Waccamaw; and ANTHONY MICHAEL TEW, 33, of Conway, South Carolina. On December 11, 2012, ROOKS and BARTLETT pled guilty to Conspiracy to Commit Mail, Wire, and Bank Fraud, in violation of Title 18, United States Code, Section 1349. MELVILLE pled guilty to Conspiracy to Commit Bank and Wire Fraud, in violation of Title 18, United States Code, Section 1349.
The charging documents in these cases collectively allege that between May of 2004 and August of 2008, ROOKS, BARTLETT, and others conspired to defraud banks and lenders in connection with the purchase, development, and resale of properties in Columbus, Brunswick, and New Hanover counties. It is further alleged that the conspirators solicited individuals at seminars in Raleigh and elsewhere to allow construction loans to be obtained in their names for the benefit of the conspirators in exchange for cash. The conspirators told the buyers that the buyers would not have to make a down payment or interest payments on the loans, and that the properties purchased in their names would be sold within twelve months. TEW and other conspirators also posted signs which included such representations as, “easy financing” and “no down payment required,” even though the buyer/borrowers were generally required to make down payments at the time of the closings. The buyers were told that if properties could not be sold in twelve months, the conspirators would buy the properties back.
The conspirators in fact enticed the buyers to participate in the transactions and engaged in various actions to make it appear to the banks and lenders that the buyers were qualified for the loans. The charges allege that TEW and other conspirators deposited money into the bank accounts of the buyers to make it appear that they had sufficient assets to conduct the transactions. To close the loans, the conspirators also referred the buyers to MELVILLE, who was at that time a North Carolina attorney who practiced real estate law. MELVILLE participated in the conspiracy by engaging in actions that made it appear to the banks and lenders that the buyers had given down payment money at the time of closing when, in fact, the buyers did not bring such money.
The banks and lenders who loaned funds to the buyers were not informed of the cash kickbacks to the buyers by the conspirators. The banks and lenders were also not informed that the buyers did not in fact have the cash to close the transactions, and that the down payment money, if any, was provided by the conspirators.
Ultimately, according to the charging documents, the conspirators were unable to sell many of the properties purchased in the names of the buyers. The buyers did not have the means to repay all of the loans obtained in the names of the buyers and, as a result, many of the loans went into default. The banks and lenders were forced to sell the properties at a substantial loss.
Today, Senior District Judge Howard sentenced MELVILLE to serve 31 months in prison, three years of supervised release, and further ordered MELVILLE to pay $1,333,020.00 in restitution.
Senior Judge Howard sentenced ROOKS to serve 30 months in prison, five years of supervised release, and further ordered ROOKS to pay $1,766,511.00 in restitution.
Senior Judge Howard sentenced BARTLETT to serve 24 months in prison, five years of supervised release, and further ordered BARTLETT to pay $1,333,020.00 in restitution.
Senior Judge Howard sentenced TEW to serve 18 months in prison, three years of supervised release, and further ordered TEW to pay $883,420.00 in restitution.
Investigation of this case was conducted by the Internal Revenue Service Criminal Investigation with the assistance of the Federal Bureau of Investigation. Assistant United States Attorney William M. Gilmore represented the United States.