Criminal Justice News

Thursday, August 23, 2012

Prison Time for Mortgage Fraud Appraiser Who Stonewalled Federal Investigators

CHARLESTON, WV—A former West Virginia licensed real estate appraiser was sentenced today to one year and six months in federal prison for aiding and abetting wire fraud, announced United States Attorney Booth Goodwin. Mark E. Greenlee, 50, of Charleston, previously pleaded guilty in September 2011. Greenlee admitted that he prepared a false and fraudulent appraisal in 2006 in furtherance of a multi-million-dollar mortgage fraud scheme perpetrated by Deborah L. Joyce and others in the Stonegate subdivision in Hurricane, Putnam County, West Virginia.

Greenlee is the second real estate appraiser prosecuted as part of the Stonegate mortgage fraud investigation. The court handed down an 18-month prison sentence today resulting in part from the defendant’s delayed cooperation in the investigation. In November 2008, federal agents executed a search warrant on the homes of defendants Greenlee and Joyce. Greenlee refused to cooperate at that time. The federal investigation continued and agents gathered sufficient information to approach former real estate appraiser, James Thornton, 48, in October 2009. When confronted, Thornton cooperated immediately, which broke the investigation open against co-defendants Joyce, Greenlee, and others. It was not until an ongoing investigation conducted by federal agents that Greenlee entered into a plea agreement in June 2011. As a result of his unwillingness to cooperate initially with federal authorities, Greenlee did not receive any relief for substantial assistance at sentencing.

Greenlee admitted that in August 2006, he prepared a residential real estate appraisal for a property known as 62 Stoneridge valuing the property at $645,000, essentially twice the then-current market value. The defendant further admitted to purposefully concealing material information about some of the comparables he used to justify the inflated appraisal price. To further the scheme, Greenlee admitted that he sent a copy of his appraisal, via e-mail, across state lines to a mortgage broker in Utah, who ultimately provided the appraisal to a lender who funded a loan. In addition, Greenlee admitted that he subsequently altered his appraisal of the 62 Stoneridge property in light of an investigation conducted by the West Virginia Real Estate Appraiser and Licensing Certification Board of the appraisals he prepared for Joyce and others in the Stonegate subdivision.

In June, Thornton admitted that he also aided and abetted the wire fraud scheme perpetrated by Ms. Joyce and others by falsifying the appraisal price for a property known as 45 Spruce Ridge. Specifically, Thornton admitted that, contrary to industry standards, he included a below-grade basement as “Gross Living Area” thereby allowing him to use comparables that were twice the square footage. He also admitted that he sent a copy of the false and fraudulent appraisal, via e-mail, across state lines to the Utah mortgage broker.

Deborah L. Joyce was sentenced in April 2011 to three years and 10 months in prison and five years of supervised release for her involvement in the Stonegate subdivision mortgage fraud scheme. Joyce’s husband, Todd Joyce, 38, of Hurricane, Putnam County, West Virginia, was also sentenced in April 2011 to one year and six months in prison on mortgage fraud and tax evasion charges.

James R. Thornton, 48, of Wilmington, North Carolina, was sentenced earlier this month to five years’ probation for his involvement in the scheme. Thornton received a reduced sentence as a result of his early cooperation in the federal investigation.

Michael S. Hurd, 37, of Salt Lake City, Utah, was also sentenced earlier this month to two years and three months in federal prison for conspiracy to commit wire fraud and bank fraud in connection to his role in the mortgage fraud scheme.

Raymond Paul Morris, 51, of South Weber, Utah, previously pleaded guilty in July to wire fraud and bank fraud for his involvement in the mortgage fraud scheme linked to the Putnam County subdivision properties. Morris faces up to 30 years in prison and a $1 million fine when he is sentenced on October 29, 2012, by United States District Judge Thomas E. Johnston.

The investigation was handled by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigative Division. Assistant United States Attorney Thomas C. Ryan handled the prosecution. The sentence was imposed by United States District Judge Thomas E. Johnston

This case was prosecuted as part of President Obama’s Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

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