Man Goes to Jail for Bank Fraud and ID Theft

Allison Tussey —  November 26, 2012 — Leave a comment

David E. Miller, 61, Brentwood, Tennessee, was sentenced to 45 months in prison for making false statements to a bank and aggravated identity theft.

The sentence followed Miller‘s conviction by a jury on May 11, 2012, of making false statements to First Bank in relation to a loan in the amount of $337,500 that Miller received in May, 2007, and the renewal of that loan one year later. Miller was also found guilty of aggravated identity theft for using the names of two individuals in a document that stated Miller had the authority to pledge real property as collateral for the loan when he had no such authority. The property belonged to Fellowship Investors, LLC, an investment group of which the individuals were members.

Miller was sentenced to 21 months each on the false statement counts to be served concurrently with each other and 24 months each on the aggravated identity theft counts to be served concurrently with each other and consecutively to the false statement sentences, for a total of 45 months in prison.

Evidence at trial established that Miller had solicited investors for the purpose of purchasing a tract of land at 4426 Harpeth School Road, Williamson County, Tennessee, that was to be held for future sale when the land would have appreciated in value. Fellowship Investors, LLC, was formed by the defendant to hold title to the property that would be jointly owned by the investing members.

Miller, who has worked as a real estate developer for three decades, advised the investors that the property would be a cash deal and that the land would be held with no encumbrances. Instead, Miller sought a loan from First Bank in the amount of $337,500 to partially fund the purchase of the property. The $337,500 loan from First Bank was to be made to the David E. Miller Development Company with the Fellowship Investors‘ property pledged as collateral. Since the Fellowship Investors‘ property would be titled in the name of Fellowship Investors, LLC, First Bank required a resolution from all of the members of Fellowship Investors with specific language in the resolution to document the knowledge and consent of all members for the land to be used as collateral for the loan to David E. Miller Development Company.

The resolution containing the names of all investors was prepared by the closing attorney in conjunction with First Bank and ultimately signed by Miller. However, Miller never advised the members that he had pledged the property as collateral for his loan. Instead Miller used part of the proceeds of the loan for his personal benefit and to fund other ventures that Miller was managing at the time.

At trial, Miller testified that he did not remember the resolution and did not remember signing it, although he did admit that it was his signature on the resolution. Further, Miller testified that had not intended to use the real property as collateral for his loan. He testified that he had only intended to use his capital contributing share in the property as collateral and that the bank had made a mistake. When asked about the Multipurpose Note and Security Agreement and Deed of Trust that he had signed pledging the real property, Miller testified that he did not realize what he was signing because he was not completely paying attention.

In sentencing Miller, Judge Marvin E. Aspen found that Miller had committed perjury when he testified at trial. Judge Aspen advised Miller that he concurred with the jury’s verdict and that Miller had committed a very serious offense. Miller presented evidence from some of the investors who testified that they did not believe Miller intended to defraud them and did not believe he should receive a prison sentence. Judge Aspen found that Miller‘s actions were motivated as much by panic as calculation and willfulness, but that Miller‘s actions were willful and that Miller knew exactly what he was doing. Judge Aspen further found that Miller had jeopardized the financial well being of many of the investors and the fact that some of them were willing to excuse Miller was not a way for Miller to avoid punishment. Judge Aspen denied Miller‘s motion for release pending appeal and ordered Miller to report to his designated place of incarceration on January 22, 2013.

The investigation was conducted by the U.S. Postal Inspection Service and the Federal Bureau of Investigation. The United States is represented by Assistant U.S. Attorneys Sandra G. Moses and Kathryn B. Ward.

Jerry E. Martin, U.S. Attorney for the Middle District of Tennessee; Keith Morris, Inspector in Charge, United States Postal Inspection Service; and Aaron T. Ford, Special Agent in Charge, Federal Bureau of Investigation, announced the sentenced.

“Fraudsters often victimize those closest to them,” said United States Attorney Jerry Martin. “Investment fraud of any kind undermines the public’s trust in the financial industry and leaves a trail of victims. The defendant received a fair and just sentence that is commensurate with the crimes committed by Mr. Miller. The U.S. Attorney’s Office will continue to aggressively prosecute those who commit such crimes.”

“This sentence validates the FBI’s commitment to relentlessly pursue those who use identity theft to prey on unsuspecting victims and to defraud lenders,” said Aaron T. Ford, Special Agent in Charge of the Memphis Division of the Federal Bureau of Investigation. “The FBI will continue to work with our partners at the U.S. Postal Inspection Service and at the U.S. Attorney’s Office to tackle these types of crimes.”

Allison Tussey

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