Former CEO guilty of defrauding major lender

by MPA12 Jun 2013

The former CEO of a loan servicing company has pleaded guilty today over a scheme to defraud a major lender out of more than $8m.

Earl Gross, the former president and CEO of Nevada-based U.S. Mortgage, pleaded guilty to one count of bank fraud in a scheme that saw the company withhold more than $8m in loan payoffs due to Wells Fargo. Gross' company was contracted by the lender to collect monthly mortgage payments from borrowers, and forward the proceeds to Wells Fargo. In the event that borrowers paid off a loan, U.S. Mortgage was to remit the full payoff amount to Wells Fargo.

Instead, Gross and U.S. Mortgage submitted fraudulent reports to the lender indicating that borrowers who had paid off their loans were continuing to make monthly payments. Rather than remit the full amount of the loan payoffs to Wells Fargo, U.S. Mortgage continued to send only the monthly payment will retaining the difference.

Gross, 75, is due to be sentenced on September 19, and could face as much as 30 years in prison. According to a Las Vegas NBC affiliate, Gross' defense attorney will seek a lighter sentence accounting for Gross' age and health.

COMMENTS

  • by Shaheed Bailey | 6/13/2013 5:14:13 AM

    This is sad!!! Are there any honest CEO's in the world? Now I see why it is so gard for me to raise capital for my company. Investor confidence is down because so-called CEO's have bad business practices and are unethical. American Greed is shadowing the American Dream. It is showing wantrepreneurs that there is an easy way to look like you have achieved success and then you have entrepreneurs like myself that put bood, sweat, tears and sleepless nights into their company and cannot get a real break. I just dealt with a guy that was just recently arrested for fraud. Fredrick D. Scott, the so-called 3.7 billion dollar hedge fund manager that scammed investors out of their money tried to play on my willingness to get my company seeded and tried to take what little I had to feed his addiction with ripping people off!!! I am so tired of hearing about good people being hurt and our economy suffering because people want to take the fast lane. The race is for the slow and steady not the swift at heart!! It's disgusting and makes me sick to my stomach.

  • by steve | 8/10/2013 8:35:27 AM

    This is his fault. He should have known only Congessmen are above the law.

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