Guilty Plea in Scam to Mislead Mortgage Lenders

admin —  March 2, 2010 — Leave a comment

Christie J. McGougan, 41, Bethune, South Carolina, pled guilty in federal court to conspiracy to falsify mortgage loan applications, a violation of Title 18, United States Code, Section 371.

Evidence presented in court established that between 2004 and 2006, McGougan and a business partner sold modular and existing homes in the Lugoff-Camden, South Carolina area. McCougan marketed the properties to buyers, telling them that they did not have to make down payments to purchases the properties. However, banks required down payments from the buyers to approve mortgage financing, and relied on closing statements prepared for each transaction to determine if the buyer was making a down payment. To deceive the banks to make the mortgage loans, McGougan used business funds to purchase cashier’s checks in the names of the buyers, giving the appearance to the banks that the buyers were making the down payments. McGougan knew that the closing statements indicated the buyers were making the down payments, but she signed or approved them anyway. The deceptive closing statements were relied upon by the bank in approving the mortgage loans.

Many of the houses in this case ended up in foreclosure, and most of the buyers ultimately declared bankruptcy. The government and McGougan dispute the amount of loss, which will be determined at sentencing, but it is estimated to be between $400,000 and over $1,000,000.

Acting United States Attorney Kevin F. McDonald stated the maximum penalty she can receive is a fine of $250,000 and/or imprisonment for five years.

United States District Judge Cameron McGowan Currie, of Columbia, South Carolina accepted the plea and has scheduled sentencing for May 25, 2010.

The case was investigated by agents of the FBI. Assistant United States Attorney Winston D. Holliday, Jr., of the Columbia, South Carolina office handled the case.

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