Archives For Oklahoma

Ronald J. McCord, 69, Oklahoma City, Oklahoma, was charged yesterday with defrauding two locally-based banks, Fannie Mae, and others. The charges include bank fraud, money laundering, and making a false statement to a financial institution.

McCord was the former President of First Mortgage Company, LLC (“FMC”), an Oklahoma City, Oklahoma based mortgage lending and loan servicing company.  The Indictment alleges a broad range of fraudulent conduct spanning approximately three years.

McCord is charged in Counts 1 through 7 with defrauding Spirit Bank (“Spirit”) and Citizens State Bank (“Citizens”), two state-chartered financial institutions, as well as their respective residential mortgage subsidiaries, American Southwest Mortgage Corporation (“Mortgage Corp.”) and American Southwest Mortgage Funding Corporation (“Funding Corp.”).  According to the Indictment, in approximately June 2016, an independent audit discovered that McCord had sold more than $14,100,000.00 in Spirit/Mortgage Corp., and Citizens/Funding Corp., loans “out of trust” by failing to repay Spirit/Mortgage Corp., when certain Spirit/Mortgage Corp., initiated loans were refinanced or otherwise paid off.  At the time of this discovery, FMC carried outstanding balances of about $200,000,000.00 and $140,000,000.00 on the Spirit/Mortgage Corp. and Citizens/Funding Corp. lines of credit, respectively.

According to the Indictment, this discovery prompted further internal review.  An internal audit revealed that McCord had misappropriated additional Spirit/Mortgage Corp. and Citizens/Funding Corp. loans by: (1) using FMC’s warehouse line of credit with (i.e., obtaining mortgage loans from) Spirit/Mortgage Corp. or Citizens/Funding Corp., selling those Spirit/Mortgage Corp. or Citizens/Funding Corp. loans to Fannie Mae, then resubmitting the loan documents to Spirit/Mortgage Corp. or Citizens/Funding Corp. to receive additional money from the Spirit/Mortgage Corp. or Citizens/Funding Corp. line of credit; (2) using FMC’s warehouse line of credit with Spirit/Mortgage Corp. or Citizens/Funding Corp. to refinance the resulting loans without repaying Spirit/Mortgage Corp. or Citizens/Funding Corp. the originally loaned funds; (3) using FMC’s Spirit/Mortgage Corp. or Citizens/Funding Corp. line of credit to fund mortgages to borrowers, receiving payments from those borrowers, but never repaying Spirit/Mortgage Corp. or Citizens/Funding Corp.; (4) obtaining funds from Spirit/Mortgage Corp. or Citizens/Funding Corp. for loans that never closed, then failing to return the funds to Spirit/Mortgage Corp. or Citizens/Funding Corp.; and (5) using FMC’s warehouse lines of credit with Spirit/Mortgage Corp. and Citizens/Funding Corp. to “double fund” loans by obtaining funds from both financial institutions to fund the same loans.

The Indictment alleges that McCord’s actions involved Spirit/Mortgage Corp. and Citizens/Funding Corp. loans that totaled approximately $40,000,000.00, in addition to the more than $14,100,000.00 in Spirit/Mortgage and Citizens/Funding Corp. loans that McCord had sold out of trust.

The Indictment further alleges that, upon learning of McCord’s conduct, Spirit/Mortgage Corp., and Citizens/Funding Corp., terminated future warehouse lending to FMC, and instituted new notification requirements that required McCord to assign FMC-funded mortgages to Spirit/Mortgage Corp. and Citizens/Funding Corp., to ensure that the title companies handling those mortgages sent payoffs directly to the banks.  Though McCord filed the assignments as required, his employees contacted the title companies handling the mortgages and directed payments to FMC, not Spirit/Mortgage Corp. and Citizens/Funding Corp.  McCord continued to collect loan payoffs without repaying Spirit/Mortgage Corp. and Citizens/Funding Corp.  He then signed releases on the assigned mortgages after receiving the payoffs, subjecting the properties to potential foreclosure should Spirit/Mortgage Corp. or Citizens/Funding Corp. try to collect payments on the mortgages, to which they held title.

According to Count 8 of the Indictment, Spirit/Mortgage Corp., and Citizens/Funding Corp.’s refusal to fund new FMC mortgages prompted McCord to seek out a new warehouse lender.  In early 2017, McCord began negotiating with CapLOC, LLC, a North Carolina based mortgage lending business, and offered to sell FMC’s mortgage lending business in exchange for quick funding from CapLOC.  In the course of those negotiations, McCord made false statements and representations to obtain CapLOC funds.  McCord then used the money to repay Spirit/Mortgage Corp. part of his outstanding $40,000,000.00 debt.

Finally, the Indictment alleges that, in 2017, FMC serviced approximately 12,000 loans worth a total of approximately $1,800,000,000.00 for the Federal National Mortgage Association (“Fannie Mae”).  Counts 9 through 24 of the Indictment allege that McCord defrauded Fannie Mae by diverting escrow monies intended to pay homeowners’ taxes, insurance, principal, and interest, to cover FMC’s operating expenses.  As a result, McCord bounced checks to more than sixty taxing authorities and borrowers throughout the Oklahoma City area and elsewhere missed making their tax payments.  The Indictment further alleges that McCord laundered the stolen escrow monies by using the funds to write himself checks, pay more than half the purchase price of his son’s $900,000.00 Oklahoma City home, and build a custom vacation home in Colorado.

With regard to the bank fraud and false statement to a financial institution charges in the Indictment, McCord faces up to 30 years in prison and a fine of up to $1,000,000.00 on each count.  He also faces up to 10 years in prison and a $250,000 .00 fine on to each of the money laundering counts. Furthermore, the Indictment seeks forfeiture from McCord in the amount of the proceeds of the fraudulent schemes and in the amount of the property involved in the offenses.

The announcement was made by Timothy J. Downing, United States Attorney for the Western District of Oklahoma.

This case is the result of an investigation by the Federal Housing Finance Agency Office of the Inspector General, Federal Deposit Insurance Corporation Office of Inspector General, and the Federal Bureau of Investigation Oklahoma City Field Office.  It is being prosecuted by Assistant U.S. Attorney Julia E. Barry.

Reference is made to the Indictment and other public filings for further information.  An indictment is only a charge and is not evidence of guilt.  A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.  To download a photo of U.S. Attorney Downing, click here.

Paul Harold Doughty, 67, Edmond, Oklahoma, the former president and chairman of First State Bank of Altus (“FSB”), was sentenced to 48 months in federal prison after a jury convicted him in July of 2016 of bank fraud, conspiracy to commit bank fraud, misapplication of bank funds, making a false bank entry, and unauthorized issuance of a bank loan in connection with FSB and various loan schemes.  United States District Judge David L. Russell also ordered Doughty to pay $10,120,166.58 in restitution to the Federal Deposit Insurance Corporation (“FDIC”).  Fred Don Anderson, 67, Eagle Point, Oregon, was sentenced to 18 months in federal prison after pleading guilty to conspiring with Doughty to commit bank fraud. Anderson partnered with Doughty in several businesses headquartered in Altus, Oklahoma. In July 2009, state banking regulators closed FSB due to the bank’s loan losses, and the FDIC was appointed as the bank’s receiver.

In April 2015, a federal grand jury charged Doughty and Anderson with fraud related to three alleged loan schemes: (1) a series of FSB loans to finance a real estate development in Routt County, Colorado; (2) a series of “senior life settlement loans” from FSB to support an Altus aerospace company; and (3) a $2 million unauthorized loan from FSB to a company under Doughty and Anderson’s control.

On July 1, 2016, after hearing seven days of trial evidence, a federal jury returned a guilty verdict against Doughty on ten counts relating to the three loan schemes. The jury acquitted Doughty on three charges. The jury heard that in 2006 and 2007, Doughty and Anderson recruited buyers for 19 Colorado real estate lots priced at approximately $700,000 each. Doughty approved and issued 14 lot loans to buyers, totaling more than $10,000,000 in loan proceeds for the seller, Mountain Adventure Property Investments, LLC (“MAPI”). MAPI was a Colorado company that Anderson had an indirect ownership interest in and where he served as president and manager. Evidence at trial showed that each loan exceeded Doughty’s individual lending authority at FSB, and most of the loans were issued without approval of FSB’s loan committee, including a $580,000 loan to Anderson’s personal company. The jury heard that Doughty and Anderson presented lots to borrowers as “zero money down” investments, and that the down payments for the purchases were often advanced or refunded to the buyers by Anderson on behalf of MAPI. Doughty and Anderson also assured the buyers that MAPI would make all payments on the loans to the bank. The jury heard that on the few occasions when Doughty presented a Colorado loan to FSB’s loan committee, he misrepresented the source and amount of borrowers’ down payments and the borrowers’ responsibility for making payment on the loans. In connection with these Colorado lot loans, the jury convicted Doughty of one count of bank fraud conspiracy, four counts of bank fraud relating to separate lot loans, and one count of unauthorized issuance of a loan to Anderson’s personal company.

United States District Judge Russell sentenced Doughty to 48 months in federal prison, followed by three years of supervised release. Judge Russell also ordered Doughty to pay $10,120,166.58 in restitution to the FDIC. Doughty must report to federal prison on Monday, April 3, 2017.

Judge Russell sentenced Anderson to 18 months in federal prison, followed by three years of supervised release. Anderson was also ordered to pay $3,250,409.12 in restitution to the FDIC. On April 14, 2016, Anderson pleaded guilty to a one-count Information charging him with conspiring with Doughty to commit bank fraud. As part of the plea agreement, the government agreed to dismiss at sentencing the charges against him from the indictment. Anderson testified as a witness for the government at Doughty’s trial.

The sentencing was announced Mark A. Yancey, United States Attorney for the Western District of Oklahoma.

These convictions are the result of an investigation conducted by the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation – Office of Inspector General. The case was prosecuted by Assistant U.S. Attorneys Chris M. Stephens and K. McKenzie Anderson.

Paul Harold Doughty, 67, Edmond, Oklahoma, the former president and chairman of First State Bank of Altus (“FSB”), was convicted on ten charges of bank fraud, conspiracy to commit bank fraud, misapplication of bank funds, making a false bank entry, and unauthorized issuance of a bank loan in connection with FSB and various loan schemes, .  Fred Don Anderson, 67, Eagle Point, Oregon, pleaded guilty to one count of conspiring with Doughty to commit bank fraud.  Anderson partnered with Doughty in several businesses headquartered in Altus, Oklahoma.  In July 2009, state banking regulators closed FSB due to the bank’s loan losses, and the Federal Deposit Insurance Corporation was appointed as the bank’s receiver.

In April 2015, a federal grand jury charged Doughty and Anderson with fraud related to three alleged loan schemes: (1) a series of FSB loans to finance a real estate development in Routt County, Colorado; (2) a series of “senior life settlement loans” from FSB to support an Altus aerospace company; and (3) a $2 million unauthorized loan from FSB to a company under Doughty and Anderson’s control.

The jury heard that in 2006 and 2007, Doughty and Anderson recruited buyers for 19 Colorado real estate lots priced at approximately $700,000 each.  Doughty approved and issued 14 lot loans to buyers, totaling more than $10,000,000 in loan proceeds for the seller, Mountain Adventure Property Investments, LLC (“MAPI”).  MAPI was a Colorado company that Anderson had an indirect ownership interest in and where he served as president and manager.  Evidence at trial showed that each loan exceeded Doughty’s individual lending authority at FSB, and most of the loans were issued without approval of FSB’s loan committee, including a $580,000 loan to Anderson’s personal company.  The jury heard that Doughty and Anderson presented lots to borrowers as “zero money down” investments, and that the down payments for the purchases were often advanced or refunded to the buyers by Anderson on behalf of MAPI.  Doughty and Anderson also assured the buyers that MAPI would make all payments on the loans to the bank.  The jury heard that on the few occasions when Doughty presented a Colorado loan to FSB’s loan committee, he misrepresented the source and amount of borrowers’ down payments and the borrowers’ responsibility for making payment on the loans.  In connection with these Colorado lot loans, the jury convicted Doughty of one count of bank fraud conspiracy, four counts of bank fraud relating to separate lot loans, and one count of unauthorized issuance of a loan to Anderson’s personal company.

Trial evidence showed that Doughty funded five so-called “senior life settlement” loans through FSB in 2008.  Each loan was $2.5 million, and one of the loans went to Anderson’s personal company.  Doughty and Anderson recruited borrowers to take out these “self-paying” loans to provide money for investments in Altus-based Quartz Mountain Aerospace, Inc. (“QMA”).  Evidence at trial showed that a portion of the loan proceeds was invested in QMA, and another portion would pay the loan’s interest.  The remaining proceeds on the loans would buy and maintain third-party life insurance policies, where the death benefits on the third parties were intended to repay the loan’s principal.  The jury heard that each loan exceeded Doughty’s lending authority, and that he issued at least $10,000,000 in senior life settlement loans without FSB’s loan committee or board approval.  With each loan, Doughty and Anderson directed $125,000.00 in “service fees” to Altus Ventures, a company under their control.  The jury heard evidence that at the time the loans were issued, the fees to Altus Ventures were not disclosed to FSB or to the borrowers taking out those loans.  In connection with the senior life settlement loans, the jury convicted Doughty of one count of misapplication of bank funds and one count of a false entry in bank records related to the concealment of the fees to Altus Ventures.

The jury also heard evidence that in January 2008, Doughty arranged a $2 million loan from FSB to Ethanol Products Group, LLC (“EPG”), a startup company in which both Anderson and Doughty had ownership interests.  Evidence showed that Doughty advanced the $2 million from FSB, above his individual lending authority, without approval by FSB’s loan committee or board.  Soon before issuing the loan, Doughty e-mailed Anderson his “cash strategy” for two other companies they controlled; the “strategy” showed all the EPG loan proceeds would be directed to companies controlled by Anderson and Doughty, ultimately diverting $100,000.00 in “officer bonuses” to Anderson and Doughty.  The jury found Doughty guilty of one count of unauthorized issuance of a loan and one count of misapplication of bank funds related to the EPG loan.

The jury heard evidence over seven days, and deliberated approximately seven hours before reaching a verdict this afternoon.  The jury acquitted Doughty on three charges.

On April 14, 2016, Anderson pleaded guilty to a one-count Information charging him with conspiring with Doughty to commit bank fraud.  As part of the plea agreement, the government agreed to dismiss at sentencing the charges against him from the indictment.  Anderson testified as a witness for the government at Doughty’s trial.  At sentencing, Anderson faces up to five years in prison and a fine of $250,000.

Doughty faces up to 30 years in prison and a fine of $1,000,000.00 for each of the ten counts of conviction.  Under federal law, each defendant will be required to pay restitution and to forfeit to the government the amount of the proceeds of the fraudulent schemes.

The convictions were announced by Mark A. Yancey, Acting United States Attorney for the Western District of Oklahoma and are the result of an investigation conducted by the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation – Office of Inspector General.  The case was prosecuted by Assistant U.S. Attorneys Chris M. Stephens and K. McKenzie Anderson.

Bruce Carlton Wright, 69, Norman, Oklahoma, was convicted following an 8-day jury trial of conspiracy and 11-counts of bank fraud. The scheme to defraud the IBC Bank of approximately $1.2 million dollars was in connection with property development.

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Mark A. Nixon, 62, Freedom, Oklahoma, former Executive Vice President of The Freedom State Bank was sentenced by United States District Judge Stephen P. Friot for his involvement in falsifying bank assets to the FDIC.

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William David Green, Yukon, Oklahoma, was sentenced to serve 24 months in federal prison for preparing a false tax return for a client. Continue Reading…

Steven Russell Hart, 55, Madill, Oklahoma, was sentenced to serve 33 months in prison for defrauding an investor of more than $700,000 to pay for construction that never took place, including five houses that did not exist.

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Eva Barroso, 54, Broken Arrow, Oklahoma, a former manager of a credit union was sentenced to serve 27 months for each count of bank fraud and tax evasion for fabricating at least three false loans in the name of nominee entities and individuals without the knowledge and authorization of the purported borrower

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Trina Tahir, 58, Oklahoma City, Oklahoma, has been sentenced to twenty-four months in federal prison and ordered to pay $382,290.82 in restitution for her role in obtaining fraudulent mortgage loans.

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Anthony E. Aguilar, and Brenda K. Wyatt, both of Norman, Oklahoma, were indicted on charges of conspiracy to commit bank fraud and making a false statement to a financial institution.

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