Four Defendants Indicted in Multi-Million-Dollar Mortgage Fraud Conspiracy
| U.S. Attorney’s Office September 08, 2011 |
TUCSON, AZ—A federal grand jury returned an indictment charging four defendants in a mortgage fraud conspiracy. The indictment charged 20-counts including conspiracy to commit bank fraud, false statement to influence a financial institution, and conspiracy to commit transactional money laundering.
The defendants charged in various counts of the indictment are: real estate developers William Michael Naponelli and Walter Scott Fruit; escrow officer Sandra Jackson; and real estate agent Brian Atwood. The defendants will be required to appear in federal court for their arraignment.
“The indictment alleges that the defendants fraudulently obtained loans for 19 properties that eventually ended in foreclosure,” said Acting U.S. Attorney Ann Birmingham Scheel. “As mortgage fraud continues to impact our communities, we also continue working closely with the IRS and FBI to hold those responsible for this fraud accountable.”
The indictment alleges that the defendants conspired to commit mortgage fraud to obtain 19 loans totaling approximately $5.85 million between the years 2006 through 2007.
According to the indictment, Naponelli and Fruit purchased properties using various business entities with which they were associated. Thereafter, Naponelli and Fruit sold these properties to straw buyers for a profit.
The indictment further alleges that the defendants submitted to lenders loan applications and other documents that contained material false representations relating to the purchase of the nineteen properties. After the fraudulently obtained loan proceeds were received portions of the loan proceeds were diverted into bank accounts under the control of some of the co-conspirators.
As a result of the mortgage fraud scheme, each of the properties referenced in the indictment went into foreclosure.
A conviction for conspiracy to commit bank fraud and false statement to influence a financial institution carries a maximum penalty of 30 years in prison, a $1,000,000 fine, or both. A conviction for conspiracy to commit transactional money laundering carries a maximum penalty of 10 years in prison and a $250,000 fine.
An indictment is simply a method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that established guilt beyond a reasonable doubt.
The investigation preceding the indictment was conducted by the Internal Revenue Service - Criminal Investigations and the Federal Bureau of Investigation. The prosecution is being handled by Jonathan B. Granoff, Assistant U.S. Attorney, District of Arizona, Tucson.
CASE NUMBER: CR11-3046-CKJ(JJM)
RELEASE NUMBER: 2011-201(Naponelli)