NORFOLK, VA—Jady Brooks, 39, formerly of
Norfolk, Virginia, was sentenced today in Norfolk federal court to 84 months in
prison, followed by five years of supervised release, for a bank fraud scheme
that defrauded Navy Federal Credit Union of nearly $1 million and for filing
false income tax returns with the Internal Revenue Service. He was also ordered
to pay restitution to Navy Federal Credit Union in the amount of $940,992 and
to the Internal Revenue Service in the amount of $275,796.
Neil H. MacBride, United States Attorney
for the Eastern District of Virginia, made the announcement after sentencing by
United States District Judge Raymond A. Jackson. Brooks pled guilty to the
charges on February 1, 2012.
According to court documents, Brooks
filed 38 loan applications with Navy Federal Credit Union on behalf of
individuals he solicited that falsely indicated the purpose of the loan was to
purchase a motor vehicle. He filed these applications for a secured car loan
because he knew that the applicants were not sufficiently creditworthy to
obtain an unsecured personal loan. In some instances, he created and submitted
false tax returns, W-2 forms, paystubs, and lease agreements in support of
these fraudulent loan applications. He instructed the borrowers to endorse the
loan proceeds checks and turn them over to him for deposit into several
business accounts he controlled. Before negotiating a check, he would write in
a description, including a vehicle identification number, of a vehicle that
supposedly would be purchased with the proceeds, knowing that no such vehicle
had actually been purchased. He also delivered fictitious bills of sale to the
credit union. He made payments to the loan recipients at times and in amounts
that he determined, always keeping a portion of the proceeds for himself. The
loans made by Navy Federal Credit Union as a result of the false applications
filed by Brooks totaled $1,560,807. Most of these loans went into default, and
without collateral to secure the loans, Navy Federal sustained losses totaling
$940,992. Brooks also failed to report on his 2008 and 2009 tax returns
approximately $770,000 in income he derived from the loan proceeds he took in
from the scheme, resulting in a total tax loss to the Internal Revenue Service
of $275,796.
This case was investigated by the
Federal Bureau of Investigation and the Internal Revenue Service-Criminal
Investigations. Assistant United States Attorney Alan M. Salsbury prosecuted
the case on behalf of the United States.
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