A veteran attorney in Birmingham, Alabama has pleaded guilty to wire fraud for his role in a criminal mortgage fraud scheme. On January 7, 2013, the United States Attorney in Birmingham unsealed the criminal charges against Attorney Kelvin Davis, which allege Davis engaged in mortgage fraud in his position as the closing attorney on numerous real estate transactions. A press release issued by the U.S. Attorney indicates that Davis’ scheme cost lenders nearly $1,000,000 in fraudulent loans.
Davis was charged with four counts of wire fraud. It is common for prosecutors to bring criminal wire fraud charges or mail fraud charges in Federal Court even when the underlying action is based on a mortgage fraud scheme. This means is that Davis is alleged to have used an interstate wire in furtherance of his participation in a mortgage fraud scheme. Most commonly the wire transaction giving rise to such a wire fraud charge is when money is wired from the lender to the closing attorney for disbursement pursuant to the HUD-1 closing statement. It is unknown from the government press release whether the borrowers submitted fraudulent loan applications, or if any representative of any of the lenders have been implicated in any mortgage fraud, bank fraud or wire fraud.
According to the prosecution, Davis submitted false mortgage documents to banks in an effort to gain approval for mortgages. Davis would then serve as the attorney that closed each of the fraudulent loan transactions.
The U.S. Attorney’s press release indicates Davis has agreed to plead guilty to wire fraud and will forfeit $269,335, which the prosecution alleges are the proceeds of his criminal mortgage fraud. Not only would Davis profit from the attorney’s fees the lender’s paid him for closing each loan, Davis’s scheme was also designed to pay him a fee for his participation in the scheme. According to the prosecution, Davis collected up to $6,000 for “lending” the purchasers money out of his attorney trust account. This “loan” was made so that the purchasers would have the necessary funds to qualify for the loans. Davis would then recoup this “loan” from the lender’s proceeds at the time of closing by reducing the amount paid to the seller. In addition to recovering these illegally loaned funds, Davis would collect the additional fee by making an additional disbursement created and owned by Davis known as “Peaceful Valley Homes.”
The maximum sentence for each wire fraud count is 20 years in prison and a $1 million fine. However, it is likely that the United States Federal Judge that will sentence Davis will take into account his acceptance of responsibility and sentence him to a much lower term of prison pursuant to the United States Federal Sentencing Guidelines. According to the Government press release, the FBI and the Department of Housing and Urban Development, Office of Inspector General, investigated the case.
If you find yourself facing federal fraud charges, it is important to find an experienced wire fraud attorney to represent you. The white collar criminal attorneys of Parkman & White, LLC have a history of success in the court room and are ready to represent clients nationwide.