Additional Charges Filed Against Former Jackson Attorney Clay Mccormack For Bank Fraud, Making False Statements
Jackson, TN – A superseding indictment was returned today by a federal grand jury against Clay McCormack, 49, of Jackson, TN, for his role in a scheme to fraudulently obtain loan proceeds from federally insured mortgage lenders, announced U.S. Attorney Edward L. Stanton III.
McCormack was initially charged in March, 2013 with two counts each of bank fraud and making false statements. The superseding indictment adds additional bank fraud and making false statements charges and alleges that as early as October 2007, McCormack entered into a criminal conspiracy with James Lee Bishop, a local real estate investor. Bishop would recruit individuals or limited liability companies to purchase real property for the purpose of investment. While acting as the closing attorney for Teel, McCormack and Maroney, a law firm in Jackson, TN, McCormack would indicate on the HUD-1 reporting documentation that certain lenders were paid off via check as a result of the closing. He would then void those checks, or have others void the checks, within days and reissue the checks to Bishop.
This money was then used by Bishop to provide the funds at closing on behalf of the borrowers, who would not have otherwise qualified for the loan. The paperwork would fraudulently reflect that the funds had actually been provided by the borrowers.
The superseding indictment charges McCormack with seven counts of bank fraud and six counts of making false statements. The bank fraud charges allege that McCormack defrauded the First State Bank, First South Bank, and Community Bank by conducting real estate closings and failing to pay off the original mortgages, while the false statement charges allege that he created false documentation and submitted it to the banks in furtherance of his crime.
McCormack’s co-conspirator, James Lee Bishop, pled guilty to bank fraud in February 2014. His sentencing hearing is set for August 29, 2014 before District Judge S. Thomas Anderson.
McCormack faces up to 30 years in prison and a one million dollar fine for each of the seven bank fraud counts; and up to five years in prison and a $250,000 fine for each of the six counts of making false statements.
This case was investigated by the FBI Memphis – Jackson Resident Agency, the Federal Deposit Insurance Corporation, and by the United States Postal Inspection Service. The case is being prosecuted by Assistant United States Attorneys Victor L. Ivy and Matthew J. Wilson on behalf of the government.
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.