Mortgage Brokerage Firm Principal and Employee Sentenced/ Another Arrested
Tampa, FL - U.S. Attorney Robert E. O'Neill announces the sentencing and arrest of individuals on mortgage fraud charges. On February 13, 2012, U.S. District Judge James D. Whittemore sentenced Mortgage Doctors, Inc. principal, Dennis Scoby (42, Clearwater) to 2 1/2 years in federal prison for conspiring to commit mortgage fraud. The court also ordered Scoby to make restitution to victim lenders for over $4 million, in addition to a $4 million forfeiture money judgment, as proceeds of the offense. On February 24, 2012, U.S. District Judge Richard A. Lazzarra sentenced Gregory Mulheran (36, Valrico) to five years probation for his role as the loan processor and ordered him to pay restitution, in the amount of $340,000. The court also ordered Scoby and Mulheran not to participate in the financial or mortgage business.
Dennis Scoby pled guilty on September 15, 2011. Gregory Mulheran pled guilty on October 28, 2011.
Another Mortgage Doctors principal, Francis Reeder (47, Fort Lauderdale), was arrested on mortgage fraud charges on December 2, 2011, in the Southern District of Florida. The case is currently pending in Tampa.
According to court documents, from December 2005 through January 2007, Scoby was a licensed mortgage broker who owned and operated Mortgage Doctors, Inc. and South Tampa Land Trust, along with his vice-president Francis Reeder. Gregory Mulheran was employed by the companies, as a loan processor. Through these companies, Reeder located at least twelve properties that were purchased by Scoby (both in his own name and jointly with his wife), and four properties that were purchased by Reeder (both in his own name and jointly with his wife), in the Tampa Bay area. Although the overall purpose of purchasing these properties was for real estate investment, these properties were purchased through loan applications that contained material misrepresentations, knowingly processed by Mulheran. These misrepresentations included information that some of the properties were primary residences when they were not. Loan documents also revealed false statements regarding employment and income, funds for closing, disclosure of other properties, and occupancy.
Down payments for the loans and initial loan payments were paid with proceeds of closings from other loans in most cases, or borrowed from other co-conspirators. Such material misrepresentations allowed Scoby and Reeder to borrow money for properties that they could not afford, and induced lenders to disburse funds for the loans based on misrepresentations as to the equity in these properties. Most of the properties have been foreclosed upon, with the total losses on the properties amounting to over $5 million.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Assistant United States Attorney Kelley C. Howard-Allen.