ALEXANDRIA, VA—Lloyd M. Mallory, Jr., 50, formerly of Silver Spring, Maryland, pleaded guilty this week to a fraud scheme that resulted in a loss to the victim exceeding $750,000.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the plea was accepted by United States District Judge Claude M. Hilton.
On March 28, 2012, Mallory pled guilty to one count of conspiracy to commit wire fraud, which carries a maximum penalty of five years in prison. He will be sentenced on June 29, 2012.
According to a statement of facts filed with his plea agreement, the fraud scheme involved the sale of loans to the Southern Management Corporation Retirement Trust, a pension plan created by Southern Management Corporation for its employees. From in or about April 2006, until in or about June 2008, Mallory’s alleged co-conspirator, Robert Fulton Rood, IV, operating as a mortgage originator and/or mortgage broker and lender, sold to and serviced for the Retirement Trust approximately 31 loans that he had originated. Of these loans, only eight performed satisfactorily. In January 2008, at the insistence of the Retirement Trust, Rood hired Mallory and his company, M-Financial Services Inc., to perform a special review of files and processes associated with those loans. Rood and Mallory represented to the Retirement Trust and its agent that Mallory was an independent and disinterested CPA.
Contrary to their representations, Mallory was not an independent, disinterested CPA. He did not perform the review of the funds and processes that he had agreed to do. In fact, the report that purported to set forth the results of his review was written almost entirely by Rood and another of his employees and grossly misstated the funds held in escrow by Rood.
This case is being investigated by the FBI’s Washington Field Office and is being prosecuted by Assistant United States Attorneys Michael E. Rich and Uzo Asonye.