Christie J. McGougan, 41, Bethune, South Carolina, was sentenced to one year and one day incarceration for participating in a Conspiracy to Falsify Loan Applications, a violation of Title 18, United States Code, Section 371. McGougan was also ordered to pay a $5,000 fine.
As previously reported on Mortgage Fraud Blog, evidence presented at the change of plea hearing established that from 2004 through 2006, McGougan and her business partner 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. 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 all the transactions is approximately $750,000.
United States Attorney William N. Nettles said, “Ms. McGougan’s conduct was part of widespread abuses in the housing market in the mid-2000s. Such abuses had a catastrophic effect on the economy. Our office has placed a priority on prosecuting those who participated in mortgage fraud. We intend to send a clear message to those who do business in our state that such crimes will not be tolerated in South Carolina.”
The case was investigated by agents of the FBI. Assistant United States Attorney Winston D. Holliday, Jr., of the Columbia office handled the case.