United States Attorney Rebecca A. Gregory
Eastern District of Texas
FOR IMMEDIATE RELEASE CONTACT: Donna Krise
TUESDAY, JUNE 3, 2008 ACTING PUBLIC INFORMATION OFFICER
www.usdoj.gov/usao/txe PHONE: (936) 639-4003
FLORIDA BUSINESSMAN AND FORT WORTH HOME APPRAISER PLEAD GUILTY IN MORTGAGE FRAUD SCHEME
Fraud Involved Over 200 Homes in the Eastern District of Texas
SHERMAN, TX United States Attorney Rebecca A. Gregory announced today that a Florida businessman and a Fort Worth real estate appraiser have pleaded guilty in connection with their roles in an extensive mortgage fraud scheme in the Eastern District of Texas.
MICHAEL GUY CARY, SR., 53, of Hollywood, Florida, pleaded guilty to one count of conspiracy to commit wire fraud and one count of money laundering, while RICHARD KIRKPATRICK, 53, of Fort Worth, Texas, pleaded guilty to one count of conspiracy to commit wire fraud.
Ms. Gregory highlighted the significance of the case. "Mortgage fraud has destroyed property values, lending institutions, and entire neighborhoods in our community. Federal and local law enforcement agencies are sharing information and resources in order to stamp out this pervasive and insidious problem in North Texas. This case is the result of such remarkable cooperation."'
Erick Martinez, Special Agent in Charge of the Dallas Field Office of the Internal Revenue Service - Criminal Investigation, agreed with the assessment of the crime and its consequences. “Mortgage fraud creates a significant loss of tax revenue, drives buyers into foreclosure, and leaves lenders burdened with bad loans and neighborhoods with abandoned and deteriorating properties. IRS CI is committed to pursuing individuals who commit these types of crimes."
According to information presented in court, between August of 2004 and May of 2006, CARY's scheme involved the purchase and sale of 211 homes in the Eastern District of Texas in a variety of fraudulent transactions. CARY purchased the homes directly from home builders after which he arranged the transfers of the deeds into names deceptively similar to that of the home builders. Once the transfers had been completed, CARY had real estate appraisers artificially inflate the values of the homes and arranged their subsequent sales to out-of-state investors, who believed that they were purchasing the homes directly from the home builders and who qualified for mortgage loans on these inflated amounts based on fraudulent loan applications. KIRKPATRICK provided the inflated appraisals on 89 of the 211 homes.
At sentencing, CARY faces up to 20 years in federal prison and a $250,000.00 fine on the conspiracy count and up to 20 years in federal prison and a $500,000.00 fine on the money laundering count. KIRKPATRICK faces up to 5 years in federal prison and a $250,000 fine. The two men will also be required to pay restitution to their victims in an amount to be determined by the court at sentencing. Sentencing dates for the two men have not been set.
The case is being investigated by Special Agents from the Internal Revenue Service – Criminal Investigation, Federal Bureau of Investigation, and United States Secret Service, with the assistance of officers from the Corinth Police Department, and prosecuted by Assistant United States Attorney Shamoil T. Shipchandler.
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