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Thursday, October 6, 2011

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Accountant Sentenced to 44 Months in Prison
For Mortgage Fraud, Conspiracy, Identity Theft
And Obstructing a Grand Jury Investigation

     WASHINGTON - Gregory L. McCormick, 58, of Silver Spring, Maryland, was sentenced today to a 44-month prison term on charges of conspiracy, bank fraud, wire fraud, aggravated identity theft, and obstruction of justice.

     The sentencing was announced by U.S. Attorney Ronald C. Machen Jr., Principal Deputy Assistant Attorney General John A. DiCicco of the Department of Justice’s Tax Division, Jeannine A. Hammett, Acting Special Agent in Charge of the Internal Revenue Service-Criminal Investigation, and U.S. Department of Commerce Inspector General Todd J. Zinser.

     McCormick was sentenced by the Honorable Ricardo M. Urbina in the U.S. District Court of the District of Columbia. He had been convicted by a jury of the charges in June 2011. In addition to the prison term, McCormick will be required to pay more than $250,000 in restitution to the lending institutions harmed by his fraudulent conduct.

     The government’s evidence at trial established that McCormick, who at the time was working as an accountant with the Bureau of Economic Analysis within the U.S. Department of Commerce, assisted Nathan Peake with his personal and business financial affairs. Peake, 41, a professional sports manager, had not filed personal income tax returns or paid taxes for the years 2000 through 2007.

     On February 12, 2008, McCormick and Peake learned that Peake was under grand jury investigation for income tax evasion. During his first interview with IRS Special Agents through his grand jury appearance, McCormick falsely represented his role in Peake’s financial affairs and failed to produce all of the records in his possession responsive to two subpoenas. When specifically questioned about the existence of additional records, McCormick deliberately misled the grand jury to believe he had produced all records within his custody and control. After his grand jury appearance, boxes of records were seized from his home and government office, as well as hundreds of e-mails and documents retrieved from his government computer.

     In addition to the obstruction of justice charge, the jury convicted McCormick for conspiring with Peake and others to obtain multiple mortgages for two residential properties owned by Peake in Maryland. Unable to obtain conventional mortgages for a number of reasons, including excessive debt and his inability to produce legitimate income tax documentation, McCormick prepared false loan applications and assisted in the submission of a fabricated letter from an actual certified public accountant that falsely indicated Peake had filed federal income tax returns. Within six months of obtaining the fourth mortgage, Peake had defaulted on these loans. The false CPA letter formed the basis for the aggravated identity theft conviction.

     McCormick no longer works at the Commerce Department.

     Peake, also of Silver Spring, Md., pled guilty in March 2011 to one count of income tax evasion and one count of conspiracy to commit bank and wire fraud. He was sentenced on October 5, 2011 to a three-year prison term. Peake also will be required to pay restitution to the IRS, at an amount to be determined later by the Court. Like McCormick, he will be required to pay restitution to the lending institutions harmed by his fraudulent conduct. Peake also must forfeit an equal amount, $253,978, in the form of a money judgment to the government.

     “This case demonstrates the perils of trying to mislead federal investigators,” said U.S. Attorney Machen. “Mr. McCormick lied about his role in this fraud and then tried to hide the documents relating to the fraud. He got caught in his lie, and now he is paying the price.”

     “Today's sentencing is a direct result of the excellent partnership that IRS and the U.S. Attorney’s office has in combating violations of Federal law,” said Acting Special Agent in Charge Hammett. “This sentence should serve as a deterrent to those who might contemplate similar fraudulent actions.”

     In announcing the sentence, U.S. Attorney Machen, Principal Deputy Assistant Attorney General DiCicco, Acting IRS Special Agent in Charge Hammett, and Department of Commerce Inspector General Zinser commended IRS Special Agents James Greczek and Christine Morrison and Department of Commerce OIG Special Agent Jacob Heminger. They also noted the assistance of Special Agents Karen Briscoe, Thomas Wade Grant and Cary Chappel. In addition, they commended paralegal specialists Tasha Harris from the U.S. Attorney’s Office and Lauren Jaffe from the Tax Division, legal assistant Jared Forney and Assistant U.S. Attorney Susan Menzer and Department of Justice Trial Attorney Sean Delaney, who prosecuted the case.



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