The schemed caused Navy Federal Credit Union losses of $2.7 million
An Atlanta man who ran a bank-fraud scheme involving home equity loans has been sentenced to prison, according to the US Attorney’s Office for the Eastern District of Virginia.
Thomas Scott Brown now faces a three-year prison term followed by five years of supervised release after pleading guilty to charges of bank fraud and false statements to a financial institution in June.
From approximately 2006 through 2007, Brown used his own money to acquire properties for buyers. He then told those individuals to apply for home equity loans with Navy Federal Credit Union. Despite still owning the properties, Brown instructed the buyers to claim to the bank that they owned the properties free and clear of any liens.
In addition, Brown instructed the home equity loan applicants to submit false documentation to the bank, including fraudulent Housing and Urban Development Settlement Statements and false membership applications. As part of the scheme, the buyers were told to pay the home equity loan proceeds to Brown.
After the loans were approved by the bank, many of the homes went into foreclosure. Because of the scheme, Navy Federal Credit Union suffered losses of $2.7 million after 51 properties that Brown sold went into foreclosure.
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Thomas Scott Brown now faces a three-year prison term followed by five years of supervised release after pleading guilty to charges of bank fraud and false statements to a financial institution in June.
From approximately 2006 through 2007, Brown used his own money to acquire properties for buyers. He then told those individuals to apply for home equity loans with Navy Federal Credit Union. Despite still owning the properties, Brown instructed the buyers to claim to the bank that they owned the properties free and clear of any liens.
In addition, Brown instructed the home equity loan applicants to submit false documentation to the bank, including fraudulent Housing and Urban Development Settlement Statements and false membership applications. As part of the scheme, the buyers were told to pay the home equity loan proceeds to Brown.
After the loans were approved by the bank, many of the homes went into foreclosure. Because of the scheme, Navy Federal Credit Union suffered losses of $2.7 million after 51 properties that Brown sold went into foreclosure.
Related stories:
Mortgage fraud risk shows 17% jump
2 New Yorkers charged with Hurricane Sandy relief fraud
