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Press Release

Former Jackson Attorney Clay Mccormack Indicted For Bank Fraud, Making False Statements

For Immediate Release
U.S. Attorney's Office, Western District of Tennessee

Jackson, TN – Clay McCormack, 49, of Jackson, TN, was indicted today by a federal grand jury for his role in a scheme to fraudulently obtain loan proceeds from federally insured mortgage lenders, announced U.S. Attorney Edward L. Stanton III.

The indictment 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; and the paperwork would fraudulently reflect that the funds had actually been provided by the borrowers. McCormack would provide a letter to the new lender indicating that they were in first lien position on the property.

Counts one and two of the indictment allege that McCormack’s scheme defrauded Community Bank, 3200 North Highland Ave, Jackson, TN and FirstSouth Bank, 1862 Hwy. 45 Bypass, Jackson, TN. Counts three and four allege that he created false documentation and submitted it to the banks in furtherance of his crime.

McCormack faces up to 30 years in prison and a one million dollar fine for each of the two bank fraud counts; and up to five years in prison and a $250,000 fine for each of the two counts of making false statements. The government is also seeking a criminal forfeiture money judgment of $3,832,366.88 representing the amount involved in the two bank fraud charges.

This case was investigated by the FBI Memphis, Jackson Resident Agency and by the United States Postal Inspection Service. The case is being prosecuted by Assistant United States Attorney David Henry on behalf of the government.

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The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.

Updated April 17, 2023