News and Press Releases

Virginia Beach Attorney Sentenced 20 Months for Mortgage Fraud

June 21, 2010

NORFOLK, Va. – Stephen M. Gunther, 40, of Hertford, N.C., was sentenced today to 20 months in prison for defrauding commercial mortgage lenders. 

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, made the announcement after sentencing by United States District Judge Raymond A. Jackson, who also ordered Gunther to pay restitution in the total amount of $231,018.45. Gunther pled guilty to wire fraud on March 25, 2010. 

            Gunther is an attorney who has a law office in Virginia Beach, Va.  Between June and December 2006, Gunther acted as a settlement agent in connection with the closing of four residential real estate loans on local properties.  The lenders were Fremont Investment & Loan, American Home Mortgage, Diversified Mortgage and Baltimore American Mortgage Corporation.  The settlement statements prepared and submitted by Gunther to the lenders did not accurately reflect the receipt and disbursement of closing and loan funds.  Gunther violated the lenders’ closing instructions by concealing agreements where he used his personal funds to pay closing costs on behalf of buyers, who were actually straw purchasers, and subsequently was reimbursed by a third party.  In addition, Gunther disbursed proceeds to a third party instead of to the seller as required by the settlement statement. 

            In reliance on the settlement statements, the lenders made loans totaling approximately $978,500.  The notes on the loans were subsequently purchased by other companies who sustained losses totaling approximately $231,018.45 when the loans on the properties went into default and were sold at foreclosure.

            The case was investigated by the FBI.  Assistant United States Attorney Alan M. Salsbury prosecuted the case for the United States.

A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at or on



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