Mortgage Fraud Mastermind Gets 11 Years in Prison

Allison Tussey —  January 3, 2014 — Leave a comment

Lloyd Gardley, 60, currently in federal custody in Pahrump, Nevada, the mastermind of a Las Vegas mortgage fraud scheme that caused approximately $15 million in losses to the lenders and financial institutions, has been sentenced to just over 11 years in federal prison for his guilty pleas to conspiracy and fraud charges.

The defendant was sentenced on Wednesday, Dec. 18, 2013, by U.S. District Judge Gloria M. Navarro. Gardley pleaded guilty in August 2012 to one count of conspiracy to commit bank fraud, mail fraud and wire fraud, one count of bank fraud, and two counts of mail fraud. He will also have to serve five years of supervised release following his release from prison and pay over $1.4 million in restitution.

As previously reported by Mortgage Fraud Blog, ten persons were charged and convicted in the scheme which occurred between 2005 and 2007 and involved the use of straw buyers and the submission of fraudulent paperwork in order to obtain mortgage loans. Lloyd Gardley was considered to be the leader of the conspiracy and recruited others into the scheme, including loan officers, real estate agents, an escrow agent, and an accountant. Once the mortgage loans were approved, the defendants caused money from the loan transactions to be disbursed to their own use and benefit.

The defendants typically rented the homes and re-sold them for a profit, using the same scheme. They then defaulted on the loans, causing approximately $15 million in losses to the lenders. The evidence showed that the defendants used the fraudulent scheme to purchase 30 homes in Las Vegas, Nevada, between 2005 and 2007. The total value of the mortgages was approximately $35 million. Some of the homes were flipped or sold twice within short periods of time.

Daniel G. Bogden, United States Attorney for the District of Nevada, announced the sentence.

The case was investigated by the U.S. Postal Inspection Service and prosecuted by Assistant U.S. Attorneys Sarah E. Griswold and Brian D. Pugh.

“Gardley is one of two individuals who were sentenced to prison this week for committing mortgage fraud in Nevada,” said U.S. Attorney Bogden. “Unfortunately, these crimes are not victimless and the damage to the community is lasting. The mortgage fraud scheme artificially inflated home values that, in turn, raised purchase prices of comparable homes, forcing innocent homebuyers to pay well above true market value for their homes. Since 2008 when the FBI and our office made mortgage fraud prosecutions a priority, we have investigated, charged and convicted hundreds of persons for federal mortgage fraud crimes and most of them are now serving time in federal prison.”

Allison Tussey

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