Warehouse Lending Fraud Results in Guilty Plea

Rachel Dollar —  August 4, 2015 — Leave a comment

Brady Bunte, the former owner of an Orange County, California mortgage lending company, pleaded guilty to bank fraud in U.S. District Court in Louisville, Kentucky in a warehouse lending fraud.  Bunte devised a scheme to defraud National City Bank of $12,744,678 of money under its control, by submitting fraudulent funding requests for nonexistent mortgage loans.

In 2007 and 2008, Bunte owned and operated Trust One Mortgage, a mortgage lender located in Orange County, California. Trust One Mortgage funded mortgages by maintaining a warehouse line of credit with various banks, including National City Bank. National City Bank was a federally insured financial institution. Its warehouse lending offices were located in Louisville, Kentucky. As a warehouse lender, National City Bank provided warehouse lines of credit to mortgage lenders.

In 2007 and 2008, Trust One Mortgage maintained a revolving warehouse line of credit with National City Bank to fund mortgages. In order to obtain funding from National City Bank for a particular mortgage, Trust One Mortgage submitted a funding request to National City Bank’s warehouse lending offices in Louisville, Kentucky. Once National City Bank received the funding request via fax or electronic request, it transferred the funds to the account specified by Trust One Mortgage in the funding request. National City Bank required Trust One Mortgage to pay off each specific loan within a set number of days. As part of its business, Trust One Mortgage sold or attempted to sell the individual mortgages to third-party investors.

From March 2007 through November 2008, Bunte caused Trust One to submit fraudulent funding requests on its warehouse line of credit to National City Bank. The fraudulent funding request caused National City Bank to incur a loss of $12,744,678.16.

Bunte was charged in a sealed indictment on September 18, 2014 and arraigned on the charge on September 29, 2014, in U.S. District Court located in Santa Ana, California.

Bunte is scheduled for sentencing before Chief District Judge Joseph H. McKinley Jr. on November 2, 2015 at 11 a.m. in Louisville, Kentucky.

This case was prosecuted by Assistant United States Attorneys Bryan Calhoun and Amanda Gregory and was investigated by the Federal Bureau of Investigation (FBI).

Rachel Dollar

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