Brad Greenberg, 53, Charlotte, South Carolina, was sentenced to 4 months home confinement and ordered to pay a $5,000 fine for Misprision of a Felony, a violation of Title 18, United States Code, Section 4.
As previously reported on Mortgage Fraud Blog, evidence presented at the change of plea hearing established that from 2004 through 2006, Brad Greenberg and his business partner, Christie McGougan, sold modular and existing homes, primarily in the Lugoff-Camden, South Carolina area, under the business name Magnolia Bay Homes. Magnolia Bay Homes marketed the properties to buyers, telling them that they did not have to make down payments to purchase 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. Greenberg knew that the closing statements indicated the buyers were making the down payments, but he allowed the process to continue, going so far as to order the down payment check on one occasion. 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 overall loss from the transactions Greenberg participated in is approximately $500,000.
The case was investigated by agents of the Federal Bureau of Investigation. Assistant United States Attorney Winston D. Holliday, Jr., of the Columbia office handled the case.