Principal at Local Mortgage Brokerage Firm Sentenced
|U.S. Attorney’s Office September 04, 2012|
TAMPA—U.S. District Judge Steven D. Merryday sentenced Mortgage Doctors Inc. vice-president Francis Reeder (47, Fort Lauderdale) to 40 months in federal prison for conspiring to commit mortgage fraud. The court also ordered Reeder to pay more than $5 million in restitution to victim lenders. He was also ordered by the court not to participate in the financial or mortgage business. Reeder pleaded guilty on June 7, 2012.
According to court documents, from December 2005 through January 2007, Dennis Scoby, a licensed mortgage broker, owned and operated Mortgage Doctors Inc. and South Tampa Land Trust, along with his vice president, Francis Reeder. Gregory Mulheran was employed by the companies as a loan processor. Through these companies, Reeder located at least 12 properties that were purchased by Scoby (both in his own name and jointly with his wife), and four properties that were purchased by Reeder (both in his own name and jointly with his wife) in the Tampa Bay area. Although the overall purpose of purchasing these properties was for real estate investment, these properties were purchased through loan applications that contained material misrepresentations, knowingly processed by Mulheran. These misrepresentations included information that some of the properties were primary residences when they were not. Loan documents also revealed false statements regarding employment and income, funds for closing, disclosure of other properties, and occupancy.
Down payments for the loans and initial loan payments were paid with proceeds of closings from other loans in most cases or borrowed from other co-conspirators. Such material misrepresentations allowed Reeder and Scoby to borrow money for properties that they could not afford and induced lenders to disburse funds for the loans based on misrepresentations as to the equity in these properties. Most of the properties have been foreclosed upon, with the total losses on the properties amounting to more than $5 million.
On February 13, 2012, U.S. District Judge James D. Whittemore sentenced Dennis Scoby (42, Clearwater) to 30 months in federal prison for conspiring to commit mortgage fraud. He was ordered to make restitution to victim lenders for more than $4 million, in addition to a $4 million forfeiture money judgment. Gregory Mulheran (37, Valrico) was sentenced by U.S. District Judge Richard A. Lazzarra on February 24, 2012, to five years of probation for his role as the loan processor. He was ordered to pay restitution in the amount of $340,000. The court also ordered Scoby and Mulheran not to participate in the financial or mortgage business.
These cases were investigated by the Federal Bureau of Investigation and prosecuted by Assistant United States Attorney Kelley C. Howard-Allen.