Former mortgage CEO arrested for bankruptcy fraud

by Ryan Smith13 Jun 2016
The former head of a large Southeastern mortgage company has been arrested on bankruptcy fraud charges.

Edward “Ted” Yoder is the former president and CEO of Monarch Mortgage, a mortgage company with branches throughout Virginia and North and South Carolina. He was indicted Wednesday on charges that he concealed more than $1 million in assets when he declared bankruptcy a few years ago, according to a Virginian-Pilot report. Yoder was arrested Thursday and released on a $5,000 bond.

Yoder declared bankruptcy in 2011 and 2012. Prosecutors say that he worked with a Virginia Beach woman to hide more than $339,000 from his creditors, the Virginian-Pilot reported. Yoder allegedly hid even more money on his own. Federal prosecutors are seeking a total judgment of $1,058,991.19.

According to the report, Yoder first filed for Chapter 11 bankruptcy protection in 2011, shortly before two lawsuits brought by the Bank of Hampton Roads were scheduled to go to trial. The bank was suing Yoder in an attempt to recover loans made to a development partnership that he had personally guaranteed, the Virginian-Pilot reported.

The Chapter 11 filing indicated that Yoder had $4 million in liabilities against just $2.74 million in assets, and prompted the lawsuits to be moved to bankruptcy court. But the Chapter 11 petition was dismissed, so in December of 2012 Yoder filed for Chapter 7 bankruptcy. While Chapter 11 allows individuals or businesses to restructure debt obligations under the court’s supervision, Chapter 7 requires the petitioner to liquidate some assets.

According to prosecutors, Yoder sold more than 132,000 shares of stock in Sirius between the two filings and wired the $339,660.19 realized in the sale to an acquaintance. He also wired another $25,000 in a separate transaction, prosecutors claim.

Yoder allegedly didn’t disclose the sale of the stock and his wire transfers in his Chapter 7 petition. And he didn’t disclose that the woman, Susan Spearman, had returned at least $310,000 to him by January of 2014, the Virginian-Pilot reported. Spearman pleaded guilty last month to bankruptcy fraud.

Prosecutors also claim that Yoder concealed more than $55,000 in federal and state tax refunds and more than $664,000 in property.

Monarch Bank and Financial Holdings, which owns Monarch Mortgage, had little to say about Yoder’s arrest.

“Although Ted Yoder was the President and CEO of Monarch Mortgage from 2007-2011, he has not worked with the company since then,” Monarch Bank and Financial Holdings CEO Brad Schwartz said in a statement. “We have no further comment about the charges filed against him today, which are unrelated to his service with Monarch.”