Criminal Justice News

Monday, May 07, 2012

Former Norfolk Resident Sentenced for Defrauding Navy Federal Credit Union and Filing False Tax Returns


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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