Thursday, June 25, 2009

Builders Indicted For Tax Credit and Loan Scam

Larry C. Shaver, 63, Port Isabel, Texas; Lewis Patrick Colbert, 62, Norman, Oklahoma; and Howard Michael Wampler, 64, Blanchard, Oklahoma, have been indicted on charges of conspiracy, fraud, and money laundering in connection with construction financing for development company McSha Properties, Inc., headquartered in Norman.

The indictment also alleges that the three defendants made a false statement to Stillwater National Bank in June of 2004 in connection with the construction of Alameda Pointe Apartments, Norman, Oaklahoma. According to the indictment, an entity that was managed and partially owned by Shaver submitted a false MacTeague Construction Company invoice in the amount of $201,006.00 to Stillwater National Bank to support loan proceeds. All three are charged with money laundering in connection with these loan proceeds, which according to the indictment were deposited into the account of MacTeague Construction and distributed to the defendants.

Twelve of the fourteen counts in the indictment relate to housing projects developed by McSha Properties and funded in part through a federal tax-credit program designed to encourage the construction of affordable housing. Developers who participate in this program receive federal tax credits that can be traded in a national tax-credit market. The amount of the tax credits awarded is based on the cost to the developer of building a housing project that qualifies for the program, which is administered in Oklahoma by the Oklahoma Housing Finance Agency.

The indictment alleges that the defendants used sham construction companies and fictitious construction invoices to inflate fraudulently the cost of building low-income housing projects. This artificial inflation is alleged to have caused the sham construction companies, which were owned by top management of McSha Properties, to receive money to which they were not entitled. It also allegedly caused the federal government to allocate tax credits for these projects in excess of the credits that should have been allocated for the projects actually built. Shaver and Wampler are charged with conspiring to commit fraud from June 3, 2002, to November of 2004 through sham companies called Frankenbury, LLC, and SLEM, LLC. In a separate conspiracy count, the indictment alleges that all three defendants conspired to commit fraud between August of 2003 and August 3, 2006. According to the indictment, the second conspiracy involved sham companies called MacTeague Construction Company, LLC; WFT Contractors, LLC; and Bokohoma Construction, LLC.

The indictment includes four counts of wire fraud and six counts of money laundering relating to low-income housing tax credit projects. The wire fraud counts are based on interstate wire communications relating to loan proceeds that included money to pay false invoices from the sham companies. The money laundering counts are based on the subsequent movement of that money into the bank accounts of the sham companies and ultimately the bank accounts of the defendants.

John C. Richter, United States Attorney for the Western District of Oklahoma, made the announcement. 

mortgage fraud