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Wednesday - February 14, 2007

JAMES THOMAS DAVIS, REAL ESTATE “CONSULTANT”
SENTENCED TO 200 MONTHS IN JAIL IN MORTGAGE FRAUD CASE;
BUILDER DAVID L. LAYTON SENTENCED AS WELL

RALEIGH - United States Attorney George E. B. Holding announced that yesterday, in Greenville, N.C., Senior United States District Judge Malcolm J. Howard sentenced the two defendants in the federal mortgage fraud case United States v. James Thomas Davis and David L. Layton, No. 5:05-CR-226-H.

JAMES THOMAS DAVIS, 56, of the Raleigh, North Carolina, was sentenced to 200 months imprisonment for his crimes. Last summer, a jury in Greenville convicted DAVIS of a conspiracy and fraud scheme involving newly built houses in Raleigh, Garner, and Wake Forest. DAVIS had purported to be a real estate “consultant” and ran entities called “Easy Financial Service” and “Eagle Investments Club.” DAVIS and others had defrauded mortgage lenders by submitting false and misleading documents, particularly HUD-1 settlement statements, to induce the lenders to make loans to borrowers recruited by Davis. Among the false statements in these documents were inflated sales prices, backed by appraisals, down payments secretly provided by the seller, and hidden cash kickbacks to DAVIS.

DAVIS and others had also defrauded individuals who were told by DAVIS that they could “lease-to-own” the houses until their credit was repaired. These victims lost thousands of dollars in down payments and monthly payments they believed would be applied to a house purchase.

The co-defendant of DAVIS, DAVID L. LAYTON, 55, a Raleigh-based residential house builder, was sentenced as well. LAYTON had pleaded guilty to conspiring with DAVIS to make and use false documents at closings where LAYTON was the seller. LAYTON testified at the trial of DAVIS as part of the United States’ case-in-chief. LAYTON told the jury, among other things, that he and DAVIS had created fake sales prices for houses based on appraisals rather than a bargain between a real buyer and seller. LAYTON received a sentence of four months imprisonment.

Both DAVIS and LAYTON are in custody.

“This fraud on the real estate market hurt not only lenders but also the many citizens who trusted DAVIS with their money, only to lose it and, in several cases, to lose the roof over their heads,” said United States Attorney Holding. “Cases like this one are important to the integrity of the real estate market, and we will continue to prosecute them.”

 

News releases are available on the U. S. Attorney’s web page at www.usdoj.gov/usao/nce within 48 hours of release.

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