Tuesday, November 07, 2006

South Carolina Brothers Plead Guilty in Mortgage Fraud Scheme

James Byrd and Eric Byrd, brothers, were charged by information and pled guilty to bank fraud and conspiracy to commit bank fraud plead in connection with allegations that they defrauded seven banks by submitting false mortgage information and kiting checks. According to the plea agreements, bank losses were between $2.5 million and $7 million.  The brothers will testify against an unidentified co-conspirator.

According to the plea agreement, beginning in early 1998, James Byrd began operating a real estate business where he would borrow money from banks to purchase residential or commercial properties and either renovate the properties or build a new building or residence on them. James Byrd and Eric Byrd would fund these real estate ventures through loans obtained from banks or individuals.  They reached their maximum borrowing limited in early 2001 and couldn’t borrower further funds to purchase new properties, renovate properties they already owned or service their existing debt.  In order to obtain additional financing James Byrd and Eric Byrd began to:

1.  Obtain inflated appraisals for their residential properties to obtain loans in excess of the property values;

2.  Sell the properties from one corporate entity owned by them to another corporate entity owned by them, inflating the sales prices in each consecutive sale;

3.  Convince family and friends to which the Byrd‘s agreed to pay;

4.  Provide falsified financial statements in the names of their family and friends to the banks including inflated monthly income, assets, or missing liabilities;

5.  Transfer properties into numerous corporate entities through their attorney conspirator, knowing that credit reporting agencies do not report loans in the names of different corporate entities (the Byrds would not report outstanding loans in the names of the corporate entities to the banks, knowing that this would increase their credit worthiness and the credit worthiness of their family and friends);

6.  Obtain construction loans from banks to perform renovations on residential houses or commercial properties;

7.  Borrow money from a particular bank on a first mortgage and later obtained a ‘first mortgage loan’ from a different bank by utilizing falsified title searches and HUD statements through a coconspirator attorney.  At the closing, they would obtain an additional loan without paying off the existing loan (aka: double first mortgage);

8.  Purchase properties and flip them to family members or corporate entities with the second transaction funding the first;

9.  Inflate their bank accounts by borrowing money from their coconspirator attorney or other individuals for a short term.

Properties identified in the information:

101 Arlington Road, Greenville, South Carolina

45 Woodside Drive, Greenville, South Carolina

405 Houston Street, Greenville, South Carolina

114 E. Morgan Street, Greenville, South Carolina

110 E. Morgan Street, Greenville, South Carolina

117 Asbury Street, Greenville, South Carolina

Business entities identified in the informations include:  Ideal Mortgage, Legal Holdings, Next Generation, L.P., Belgium Properties, and Property Centre

In the check-kiting scheme, the Byrds fraudulently obtained $1.2 million from SunTrust Bank by depositing bad checks between various accounts at two different banks, according to court documents.

mortgage fraud

1. try looking at JB Properties Greenville, LLC..owned by Collin Mackie (SVP lend tonVP at Greenville First).  The LLC purchased all the properties the bank had bad debt on at zero cost.  why would mackie eat that unless he is hiding a whole lot more the regulators/lawyers would uncover if those properties were involved.  do some digging on that one, bank lend tons of $$$ and then buys all the assoicted properties to pay off the loans......

   Posted by  on  04/04  at  04:15 PM