Elk Grove Attorney Sentenced to More Than Two Years in Prison for Role in Mortgage Fraud Scheme
|U.S. Attorney’s Office September 24, 2013|
SACRAMENTO, CA—United States District Judge John A. Mendez sentenced Sean Patrick Gjerde, 37, of Elk Grove, today to two-and-a-half years in prison for conspiring to commit mortgage fraud and make false statements in loan applications, United States Attorney Benjamin B. Wagner announced. Gjerde pleaded guilty to the charges on December 18, 2012.
According to court documents, Gjerde, an attorney, took part in a mortgage fraud scheme by providing false income verifications. He was hired by Hoda Samuel, the owner and operator of with Liberty Real Estate & Investment Company, a real estate agency, and Liberty Mortgage Company, a mortgage brokerage business. Samuel was convicted after a jury trial and recently sentenced to 10 years in prison. Eight others were charged in the scheme. Seven other co-defendants in the scheme pleaded guilty and are awaiting sentencing.
According to Gjerde’s plea agreement, certain Liberty clients falsely told lending institutions that they were self-employed and made incomes far in excess of what they actually earned. Gjerde wrote letters to the lenders stating that he was an attorney with a masters in taxation who had prepared individual tax returns for the clients and could attest that they were employed as they stated in their loan applications. When lenders called Gjerde to follow up on the fraudulent letters, Gjerde falsely confirmed the information he had provided. On at least one occasion, he signed a false tax return that was submitted to a lender to establish inflated income. Gjerde admitted writing approximately 20 fraudulent letters.
As of April 2012, Gjerde had 18 cases pending against him before the California State Bar Court. Each of these contained allegations of misconduct, and none of them were related to the mortgage fraud charged in the federal indictment. On April 18, 2012, the State Bar Court determined that the allegations were likely to be upheld in a majority of the pending cases and involuntarily enrolled Gjerde as an inactive member of the bar.
In sentencing Gjerde, Judge Mendez said that Gjerde willfully lied to back up the lies in the loan applications, and that as a lawyer, “He should have shut this whole thing down. That’s his obligation as a lawyer. He didn’t do that. He went along with it.” Judge Mendez also noted the allegations pending before the State Bar Court and the number of former clients who had been affected by Gjerde’s conduct.
This case is the product of an investigation by the Federal Bureau of Investigation and IRS-Criminal Investigation. Assistant U.S. Attorneys Philip A. Ferrari and Todd A. Pickles are prosecuting the case.