BANKER SENT TO PRISON FOR ROLE IN FRAUD CASE INVOLVING TARP MONEY

FROM:  U.S. JUSTICE DEPARTMENT 

Thursday, February 25, 2016

Former President and CEO of Georgia-Based Bank Sentenced to 84 Months in Prison for Role in Bank Fraud Conspiracy

A former president and CEO of a Georgia-based bank was sentenced today to 84 months in prison for his role in a conspiracy to commit bank fraud and major fraud against the United States.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney G.F. Peterman III of the Middle District of Georgia made the announcement.

Gary Patton Hall Jr., 50, of Tifton, Georgia, was sentenced by Senior U.S. District Judge Hugh Lawson of the Middle District of Georgia.  In addition to imposing the prison term, Judge Lawson ordered Hall to pay $3,931,018 in restitution to the bank and federal agencies for losses suffered.  In December 2015, Hall pleaded guilty to one count of conspiracy to commit bank fraud and one count of conspiracy to commit major fraud against the United States.

According to court documents, Hall was the president and CEO of Tifton Banking Company (TBC) from August 2005 until June 2010.  As part of his guilty plea, Hall admitted that he engaged in a scheme to mislead the bank and its loan committee about loans that TBC made to local individuals and businesses.  Hall hid past-due loans from the Federal Deposit Insurance Corporation (FDIC) and the TBC loan committee, which resulted in the bank continuing to approve and renew delinquent loans and loans for which the collateral was lacking, he admitted.   Several of the borrowers eventually defaulted on the loans, resulting in millions of dollars in losses to TBC and others.

At his plea hearing, Hall admitted that in certain transactions in which he exercised approval authority, he made false representations about the loans to TBC’s loan committee and hid his personal and business interests, including approving loans to the buyer of a condominium in Panama City Beach, Florida, owned by Hall himself.  Hall admitted that he hid the loans from the FDIC and state regulators when the buyer’s payments became delinquent, and that he received $50,000 profit from the sale of his condo.  The buyer eventually declared bankruptcy, resulting in a loss of more than $400,000 to TBC.

Hall also admitted to making fraudulent representations that led to commercial loan guarantees being issued by the U.S. Small Business Administration (SBA) and the U.S. Department of Agriculture (USDA) on two other loan transactions.  The loans were made by TBC and guaranteed by the government agencies to refinance earlier non-performing commercial loans made by TBC as part of the scheme to mislead bank regulators and hide the bank’s true financial condition.  Those guaranteed loans resulted in more than $2 million in losses to the bank and the agencies.

In November 2010, the Georgia Department of Banking and Finance closed TBC because of its poor financial condition.  At that time, TBC had not repaid the $3.8 million it received from the Department of Treasury’s Troubled Asset Relief Program (TARP).

The FBI, the Special Inspector General for TARP, the SBA’s Office of the Inspector General, the FDIC Office of the Inspector General, the USDA’s Office of Inspector General and the Tifton County Sheriff’s Office investigated the case.  Senior Trial Attorney N. Nathan Dimock of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Robert McCullers of the Middle District of Georgia prosecuted the case.

MAN PLEADS GUILTY FOR PART IN NATIONWIDE FORECLOSURE SCAM

FROM: U.S. DEPARTMENT OF JUSTICE
Monday, April 8, 2013

Former Federal Fugitive Pleads Guilty in California to Massive Fraud and Identity Theft Scheme in Connection with Nationwide Foreclosure Scam Defendant Collected More Than $1.2 Million from More Than 800 Distressed Homeowners

A former Los Angeles resident, who fled to Canada and was a federal fugitive for 12 years, pleaded guilty today to aggravated identity theft and bankruptcy fraud in connection with leading a nearly 15-year foreclosure-rescue scam that fraudulently postponed foreclosure sales for more than 800 distressed homeowners, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Central District of California André Birotte Jr., U.S. Attorney for the Northern District of California Melinda Haag, Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office, Special Agent in Charge David J. Johnson of the FBI’s San Francisco Field Office and Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

Glen Alan Ward, 48, pleaded guilty in connection with three separate sets of charges in the Central and Northern Districts of California, all stemming from Ward’s 15-year fraud. In 2000, Ward became a federal fugitive when he failed to appear in court after signing a plea agreement, which arose out of federal charges in 2000 in the Central District of California related to Ward’s early conduct in the scheme. In 2002, Ward was indicted on multiple counts of bankruptcy fraud in the Northern District of California for continuing the scheme in and around San Francisco. On Aug. 17, 2012, Ward was indicted on mail fraud, aggravated identity theft, and additional bankruptcy fraud counts in the Central District of California after fleeing to Canada and continuing his fraud from there. While in Canada, Ward recruited Frederic Alan Gladle, who was indicted in the Central District of California for bankruptcy fraud and identity theft in 2011, and was sentenced in 2012 to 61 months in custody for engaging in similar conduct.

On April 5, 2012, Ward was arrested in Canada by the Royal Canadian Mounted Police and the Waterloo Regional Police Service based on a U.S. provisional arrest warrant. On Dec. 21, 2012, Ward was extradited to the United States to answer all three sets of charges.

"Glen Alan Ward spent years preying on distressed homeowners and stealing the identities of bankruptcy debtors, all to pad his own pockets," said Acting Assistant Attorney General Raman. "Now he faces years in prison for his crimes. This successful prosecution illustrates our commitment to tirelessly pursuing fraudsters and ensuring that sophisticated schemes that prey on vulnerable homeowners will not go unpunished."

"Mr. Ward fled the United States years ago in an attempt to keep his fraudulent foreclosure scheme running," said United States Attorney André Birotte Jr. "Today's conviction should serve as a reminder that criminals can run, but they can't hide. The reach of the federal law is long and scammers like Ward, who try to take advantage of distressed homeowners, will be tracked down and prosecuted regardless of their efforts to do otherwise."

According to the plea agreement filed today before U.S. District Judge Dale S. Fischer in the Central District of California, Ward admitted to engaging in a fraud scheme that took place from 1997 to April 5, 2012, the day he was arrested by Canadian authorities. According to the plea agreement, Ward led a scheme that solicited and recruited homeowners whose properties were in danger of imminent foreclosure. Ward promised to delay their foreclosures for as long as the homeowners could afford his $700 monthly fee. Once a homeowner paid the fee, Ward accessed a public bankruptcy database and retrieved the name of an individual debtor who recently filed bankruptcy. Ward admitted that he obtained copies of unsuspecting debtors’ bankruptcy petitions and directed his clients to execute, notarize and record a grant deed transferring generally a 1/100th fractional interest in their distressed home into the name of the debtor that Ward provided. Then, after stealing the debtor’s identity, Ward faxed a copy of the bankruptcy petition, the notarized grant deed and a cover letter to the homeowner’s lender or the lender’s representative, directing it to stop the impending foreclosure sale due to the bankruptcy.

Because bankruptcy filings give rise to automatic stays that protect debtors’ properties, the receipt of the bankruptcy petitions and deeds in the debtors’ names forced lenders to cancel foreclosure sales. The lenders, which included banks that received government funds under the Troubled Asset Relief Program (TARP), could not move forward to collect money that was owed to them until getting permission from the bankruptcy courts, thereby repeatedly delaying the lenders’ recovery of their money for months and even years. In addition, if a distressed homeowner wanted to complete a loan modification or short sale, they were left to the mercy of Ward to send them forged deeds, supposedly signed by the debtors, to re-unify their title as required by most lenders.

As part of the scheme, Ward delayed the foreclosure sales of approximately 824 distressed properties by using at least 414 bankruptcies filed in 26 judicial districts across the country. During that same period, Ward admitted to collecting more than $1.2 million from his clients who paid for his illegal foreclosure-delay services, all of which he has agreed to forfeit.

"Today's announcement is the result of a collaborative international effort and the FBI is grateful to our partners with the Royal Canadian Mounted Police and the Waterloo Regional Police for their assistance in the fugitive investigation and apprehension," said Bill Lewis, the Assistant Director in Charge of the FBI's Los Angeles Field Office. "Mr. Ward's long-term scheme is an extreme example of calculated fraud based on greed, and I'm proud of the persistence shown by our federal partners at SIGTARP, the Office of United States Trustees, and the United States Attorney's Office, in pursuing this case to its successful end."

"We are committed to pursuing those who defraud the most vulnerable victims of the real estate market," said FBI San Francisco Special Agent in Charge David J. Johnson. "This is an excellent example of how closely we work with our law enforcement partners here and abroad to ensure that criminals are brought to justice."

"With today’s plea, justice is served for the victims of Ward’s long-running bankruptcy fraud scheme," said Christy Romero, Special Inspector General for TARP (SIGTARP). "While on the run for 12 years and having fled to Canada to avoid answering for earlier charges of bankruptcy fraud, Ward continued to victimize hundreds of struggling homeowners, steal the identities of unsuspecting U.S. taxpayers involved in bankruptcy proceedings, and exploit civil protections under bankruptcy law to defraud lenders, including numerous TARP recipients. SIGTARP and our law enforcement partners will continue to ensure that those responsible for fraud related to TARP are brought to justice and answer for their crimes."

Each count of bankruptcy fraud carries a maximum sentence of five years in prison. Aggravated identity theft carries a two-year mandatory sentence, to run consecutive to any other sentence. Ward will be sentenced on July 29, 2013 before United States District Judge Dale S. Fischer, and will continue to be held without bond.

This case is being prosecuted by Trial Attorney Paul Rosen of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Evan Davis of the U.S. Attorney’s Office for the Central District of California. Assistant U.S. Attorney Jonathan Schmidt is prosecuting the charges in the Northern District of California, which were transferred to the Central District of California for entry of the guilty pleas. The investigation was conducted by SIGTARP and the FBI, which received substantial assistance from the U.S. Trustee’s Office. In addition, the Canadian Waterloo Regional Police Service and Royal Canadian Mounted Police provided exceptional support and assistance in connection with Ward’s arrest and extradition.

This prosecution is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.

MAN PLEADS GUILTY TO FORECLOSURE RESUCE SCAM AND DISABILITY FRAUD

FROM: U.S. DEPARTMENT OF JUSTICE
Tuesday, August 28, 2012
Las Vegas Man Pleads Guilty to Foreclosure Rescue Scam and Theft of Government Funds
WASHINGTON – A Las Vegas man pleaded guilty today to operating a foreclosure rescue scam that defrauded distressed homeowners who were struggling to pay their mortgages, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.

Alex P. Soria, 65, pleaded guilty before U.S. District Judge Lloyd D. George in the District of Nevada to one count of wire fraud and one count of theft of government funds in connection with a scheme to defraud homeowners who were behind on their mortgages.

According to court documents, Soria identified homeowners whose mortgage debt exceeded the value of their homes and charged them a fee purportedly to reduce the principal balance of their mortgages using money from the Department of the Treasury’s Troubled Asset Relief Program (TARP). Soria admitted in court that he lied to homeowners about his affiliation with several mortgage lenders and that he provided victims with fraudulent letters stating they had been approved for loans. Soria also admitted he falsely told victims that his loan program had been successful in the past and charged homeowners for loan modifications he knew he could not deliver. Court documents show that Soria concealed from homeowners the fact that the state of Nevada had issued a cease and desist order which legally prohibited him from working in the mortgage industry. Soria collected more than $100,000 in fees from distressed homeowners, many of whom lost their homes to foreclosure after Soria failed to deliver the loan modifications he promised.

As part of the same case, Soria also pleaded guilty to continuing to collect Social Security Disability Insurance benefits while at the same time receiving income from his foreclosure rescue operation. The Social Security Disability Insurance program is a federal program that replaces the wages of individuals who become unable to work due to a disability. Soria admitted to collecting more than $200,000 in disability benefits from 1990 to 2010 while at the same time receiving income that he concealed from the Social Security Administration.

This case is being prosecuted by Trial Attorneys Brian R. Young and Mary Ann McCarthy of the Justice Department Criminal Division’s Fraud Section. The case was investigated by the Offices of Inspector General for the Department of Housing and Urban Development and the Social Security Administration. The U.S. Attorney’s Office for the District of Nevada assisted with the investigation and prosecution of this case.