LOUISVILLE, KY – November 26, 2012 – (RealEstateRama) — A Jeffersonville, Indiana man was sentenced in United States District Court this week by District Judge Charles R. Simpson, III to 15 months in prison and ordered to pay $487,111 in restitution after pleading guilty to engaging in a conspiracy, with five indicted co-defendants, to commit bank and wire fraud. In court, Dane Little admitted to intentionally devising a scheme to defraud various banks and mortgage lenders by submitting fraudulent mortgage loan information in the purchase of 19 properties in Louisville, Kentucky and Jeffersonville, Indiana, totaling nearly $5 million dollars announced David J. Hale, United States Attorney for the Western District of Kentucky.
“Combating mortgage fraud is a priority of the Department of Justice and my office. We will continue to work with the FBI and our other important partners, such as the Kentucky Department of Financial Institutions, to stop these crimes and bring the people responsible to justice,” stated David J. Hale, United States Attorney. “Fraudsters such as Little—whose scam allowed him to make off with excess loan proceeds—have fueled foreclosures and added to neighborhood blight. Their crimes cause serious harm to our communities, as well as to lenders, and the real estate and housing industries.”
According to the indictment returned by a federal grand jury on February 24, 2011, between November 1, 2006 and August 30, 2008, Shawn Bramlett, Billy D. McDaniels, Dane Little, Kyle Kark, and Mark Hack all of Jeffersonville, Indiana; and Stephen C. Netherton of Louisville, Kentucky, perpetrated a fraudulent scheme against various banks and commercial lending companies, including Wells Fargo Bank, Bank of America (formerly Countrywide Home Loans), Accredited Home Lenders, Primary Residential Mortgage Company, and First Franklin Financial Company. The indictment claims that they submitted applications and other documents for loans which contained false and fraudulent information, including false employment information, false and fraudulent bank account balances, and false representations that down payments were being made toward purchases of properties.
According to court records, after loan applications were approved for funding, the loan proceeds were wire transferred in interstate commerce to designated accounts with various banks in Louisville, Kentucky, whereby the defendants and other unnamed co-conspirators appropriated, for their personal benefit and gain, portions of the fraudulently obtained loan proceeds.
The Louisville grand jury returned a second charge in the superseding indictment against Little and Netherton charging them with conspiracy to commit bank fraud in a separate but similar fraudulent scheme against various banks and commercial lending companies. They submitted applications and other documents for automobile loans which contained false and fraudulent information, including borrower’s employment, income and assets, and identity of the seller of the vehicle.
According to court records, between October 22, 2010 and December 31, 2010, the defendants caused fraudulent loans to be funded in the amount of $118,000, purportedly to purchase four vehicles and in at least one instance, no car was purchased. After obtaining the loans, the defendants and other unnamed co-conspirators appropriated for their personal benefit and gain portions of fraudulently obtained loan proceeds.
To date, all six defendants have entered guilty pleas with the court, and two defendants, including Little, have been sentenced. Stephen Netherton was sentenced on April 6, 2012, to serve 24 months in federal prison, concurrent to his state sentence, and ordered to pay restitution in the amount of $874,100. McDaniels and Kark are scheduled for sentencing next month, while Hack and Bramlet are scheduled to be sentenced in the early months of next year.
The case is being prosecuted by Assistant United States Attorney Jim Lesousky, and it was investigated by the Federal Bureau of Investigation and the Kentucky Department of Financial Institutions. Mortgage fraud is a priority area for the President’s Financial Fraud Enforcement Task Force. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit StopFraud.gov.
Western District of Kentucky