Banker Pleads Guilty to Felony False Statement Charge
GREENVILLE, NC—United States Attorney Thomas G. Walker announced that in federal court today before United States Magistrate Judge Kimberly A. Swank, MATTHEW MARKS WESTBROOKS, 33, of Lexington, South Carolina, pleaded guilty to a Criminal Information charging him with Making Material False Statements, in violation of Title 18, United States Code, Section 1001.
The Criminal Information to which WESTBROOKS pled guilty charged that during times material to the case, WESTBROOKS was employed as a mortgage originator in the Eastern District of North Carolina. WESTBROOKS was separately, but simultaneously, engaged with others in the business of buying and selling properties for profit. In his work as a mortgage originator, WESTBROOKS received a commission whenever he successfully assisted a borrower to obtain a mortgage loan. WESTBROOKS did not receive a commission if the mortgage loan was not approved by the lender, and if the associated real estate transaction did not close.
The Criminal Information further charged that as a mortgage originator, WESTBROOKS was responsible for, among other things, typing borrower loan qualifications and other information into software used by his employer to electronically transmit loan application information from North Carolina to banks and lenders located in various other states. The Loan Application Software was also used to generate a physical or electronic copy of a Uniform Residential Loan Application, or Form 1003, containing borrower loan application information. Form 1003 required the borrower to identify, among other things, the source of any down-payment funds. Form 1003 contained a warning that “misrepresentation(s) of the information contained in this application may result in . . . criminal penalties, including, but not limited to, fines or imprisonment. . .”
The Criminal Information further alleged that as a mortgage originator, WESTBROOKS was required by his employer on each transaction to communicate with the borrower regarding the borrower’s obligations at closing, including the requirement to bring to the closing cash due from the borrower under the terms of the loan. Specifically, WESTBROOKS was required to obtain a copy of the HUD-1 Settlement Statement (“HUD-1”) from the closing attorney. The HUD-1 showed, among other things, the remaining balance of the “Borrower’s Obligation,” or cash due from the borrower at closing. WESTBROOKS was obligated to review the HUD-1s and confer with the borrower regarding the Borrower’s Obligation, as set forth in the HUD-1.
The banks and lenders did not permit the seller, the mortgage originator, or a third party to the transaction to “front” or pay the Borrower’s Obligation on behalf of the borrower. The borrower was obligated to bring to closing the amounts identified on the HUD-1 in satisfaction of the Borrower’s Obligation. Moreover, the HUD-1 contained a warning that providing false statements on the HUD-1 could result in a prosecution under Title 18, United States Code, Section 1001.
The Criminal Information specifically alleged that on or about February 14, 2007, WESTBROOKSfalsified a loan application and HUD-1 Settlement statement which reflected that the borrower supplied down payment funds when, in fact, the defendant had supplied the funds on behalf of the borrower.
At the sentencing in this case, which is presently scheduled for the January 2015 term of court,WESTBROOKS faces up to five years of imprisonment, up to a $250,000 fine, up to three years of supervised release, and an order of restitution.
The case against WESTBROOKS relates to the pending cases against developer JUSTIN LEE ROOKS, 31, of Loris, South Carolina; developer MICHAEL THOMAS BARTLETT, 46, of Myrtle Beach, South Carolina; closing attorney ROBERT HAROLD MELVILLE, JR., 50, of Lake Waccamaw; andANTHONY MICHAEL TEW, 31 of Conway, South Carolina. On December 11, 2012, ROOKS andBARTLETT 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 charges against MELVILLE,ROOKS, and BARTLETT carry maximum penalties of 30 years in prison and up to $1 million in fines. On February 12, 2013, TEW pled guilty to Conspiracy to Commit Mail, Wire, and Bank Fraud, in violation of Title 18, United States Code, Section 371, which carries a maximum term of imprisonment of five years and up to $250,000 in fines.
Investigation of this case was conducted by the Internal Revenue Service—Criminal Investigation and the Federal Bureau of Investigation. Assistant United States Attorney William M. Gilmore represented the United States.