A 57-year-old former Layton resident was recently sentenced in connection with an alleged a mortgage fraud scheme. Authorities say that the man will spend 36 months in federal prison after being convicted of three counts of mail fraud, three counts of wire fraud, and one count of money laundering.
In addition to sentencing the man to prison, U.S. District Judge Richard J. Shelby also imposed a $1,905,651.68 restitution order against the man.
The man operated a number of companies between 2006 and 2011 which the U.S. Attorney’s Office alleges he used to obtain money and property from mortgage lenders and real estate investment students. The companies were used to promote the man’s real estate investing consulting business. The man represented himself as a successful real estate investor and charged students a fee for his consulting and coaching services.
What the man failed to disclose is that he had felony fraud convictions in Utah and grand theft convictions in California. Students allegedly paid between $15,000 to $30,000 for the man’s services and never received the promised coaching.
The sophisticated scheme also employed students as straw buyers for real estate and used mortgages on this real estate to give mortgage lenders the false impression that their loans were performing well.
Although this case represents sophisticated fraud scheme, similar charges may be brought against Utah entrepreneurs who use puffery to build a consulting practice or follow nontraditional business models. It is important to seek the advice of a qualified criminal defense attorney if you suspect that you are being investigated for fraud in connection with your business.
Source: Utah DOJ, “Cook Sentenced To 36 Months In Prison In Connection With Mortgage Fraud Scheme,” Aug. 6, 2013