Press Releases
SEVEN DEFENDANTS SENTENCED IN MORTGAGE FRAUD SCHEME
February 22, 2007
FOR IMMEDIATE RELEASE
Hattiesburg, MS - Richard B. Lucas, Kimberly A. Castle, Kenneth Stalnaker, Loretta Joy Champ, Jacquelyne B. Mosley, Kenneth Fairley, Jr., and Michael T. Cox were sentenced on February 20, 2007 for their involvement in a mortgage fraud conspiracy involving wire fraud in violation of federal law, announced Dunn Lampton, U.S. Attorney for the Southern District of Mississippi, Stephen F. Gomez, Acting Special Agent in Charge of the Jackson Field Office of the FBI, and Rodney Clarke, Special Agent In Charge of the IRS-Criminal Investigation, New Orleans Field Office.
In addition, Richard B. Lucas and Kimberly A. Castle were sentenced for conspiracy to commit money laundering. Five other defendants in this case -- Phillip N. Weary, William Vaston Fairley, Jafus Jones II, Kristy N. Packer, and Marcy Irby -– were sentenced on February 1, 2007.
The three defendants in this case who were found guilty at trial -- Lucas, Castle, and Stalnaker -- received the most severe sentences. Lucas, the ringleader of the conspiracy, was sentenced to 168 months of imprisonment to be followed by five years of supervised release. He also was ordered to pay $1,326,727 in restitution to Countrywide Home Loans, Inc.
Castle, who served as Lucas’s lawyer in handling all of the loan closings involved in the scheme, was sentenced to 48 months of imprisonment followed by three years of supervised release, and ordered to pay $1,390,250 in restitution.
Stalnaker, a real estate appraiser who was charged with preparing inflated appraisals, was sentenced to 28 months of imprisonment followed by five years of supervised release, and ordered to pay $938,767 in restitution.
The four other defendants sentenced on Tuesday -- Loretta Joy Champ, Jacquelyne B. Mosley, Kenneth Fairley, Jr., and Michael T. Cox -- all pled guilty to the charges in this case.
Champ, who also prepared inflated real estate appraisals, was sentenced to nine months of imprisonment followed by three years of supervised release, and ordered to pay $152,089 in restitution.
Mosley, another real estate appraiser who testified at trial about the scheme, was sentenced to three years of probation with six months of house arrest. She was ordered to pay $120,000 in restitution.
Fairley, who served as a straw buyer of properties for Lucas, was sentenced to five years of probation with six months of home confinement. He was ordered to pay $97,055 in restitution.
Cox, who prepared bogus financial documents for Lucas and who testified at trial about the scheme, was sentenced to three years of probation with nine months of house arrest. He was ordered to pay $91,774 in restitution.
The five other defendants, Phillip N. Weary, William Vaston Fairley, Jafus Jones II, Kristy N. Packer, and Marcy Irby, who were sentenced on February 1, 2007, all pled guilty and received the following sentences:
Weary, who was the nominal purchaser of all of the properties acquired as part of the scheme, was sentenced to 19 months of imprisonment to be followed by three years of supervised release. He was also ordered to pay $925,540 in restitution.
Fairley, who helped recruit investors, was sentenced to seven months of imprisonment to be followed by seven months in a halfway house and three years of supervised release. He was ordered to pay $355,475 in restitution.
Jones, who also served as a recruiter for Lucas, received three years of probation with nine months of home confinement and was ordered to pay $128,120 in restitution.
Packer, a straw buyer for Lucas, received five years of probation with six months of home confinement and was ordered to pay $191,888 in restitution.
Irby, a straw buyer who testified about the scheme at trial, received 48 months of probation and was ordered to pay $101,673 in restitution.
As described in the indictment which was the basis for the three-week trial in October, 2006 against Lucas, Castle, and Stalnaker, defendant Lucas arranged for Weary, Vaston Fairley, and Jones to acquire properties in Hattiesburg and Laurel at low prices for immediate resale. Lucas arranged for Clark and Jones to recruit persons to serve as borrowers on mortgage loans for the properties with the understanding that the borrowers would put no money down and would often receive cash payments for use of their names and credit ratings. Where the borrowers’ credit histories did not support the mortgage loans, Lucas arranged for Cox to prepare false income statements and bank account information to be submitted to the lenders. In addition, Lucas arranged for Fairley, Packer, and Irby to acquire properties in their names.
Even though no down payments were made by the borrowers, the Housing and Urban Development form (HUD-1) that is required to be completed by the closing attorney (Castle)
