Keith Churn, 44, Nashville, Tennessee, was found guilty of bank fraud by a federal jury on Friday, December 6, 2013.
Churn was convicted of seven counts of bank fraud in connection with a scheme to defraud a federally-insured financial institution that had issued loans for the construction of modular homes in Nashville and Franklin, Tennessee. Churn was found not guilty of four additional counts of bank fraud.
Evidence at trial showed that Churn made numerous false statements to a Tennessee bank in order to induce additional draws on certain construction loans, the proceeds of which Churn transferred to a bank account under his control, as well as to conceal his scheme and to dissuade the bank from calling these loans. Churn submitted false invoices from a modular home manufacturer, falsely representing that down payments had been made and that modular units had been ordered, and misrepresented the status of construction that had been done to date. The evidence also demonstrated that Churn failed to fulfill his promises to make interest payments on behalf of certain individuals who had applied for the construction loans at issue, causing these loans to be foreclosed.
Churn will be sentenced by United States District Court Chief Judge William J. Haynes, Jr. on a date yet to be determined. He faces a maximum penalty of 30 years in prison for each count, as well as fines and forfeiture of the money derived from the fraudulent scheme.
David Rivera, United States Attorney for the Middle District of Tennessee, announced the verdict.
The U.S. Secret Service conducted this investigation. Assistant U.S. Attorneys Sandra G. Moses and William F. Abely prosecuted the case.
“The jury’s verdict confirms that those who seek to profit through fraudulent financial schemes will be held responsible,“ said U.S. Attorney David Rivera. “This office and our law enforcement partners remain dedicated to ferreting out and prosecuting all varieties of financial fraud.”
“The Secret Service will continue to aggressively investigate financial crimes, to include mortgage fraud schemes such as the one perpetrated by Mr. Churn, in order to support the integrity of our nation’s financial infrastructure and to bring to justice those that use the financial system to victimize others,” said U.S. Secret Service Special Agent in Charge Todd Hudson.