(Columbia) September 1, 2006 - Last March, a Greenville lawyer admitted he sent false loan documents to residential mortgage lenders in the Upstate. Now Alex J. Newton has been sentenced to 41 months in federal prison.
Between May 2002 and March 2004, the 35-year-old closed a series of residential loans designed for the purchase of single family, owner-occupied homes. Newton admitted misleading the mortgage lenders by conducting undisclosed flip transactions, in which co-conspirators bought and immediately re-sold the houses at inflated prices based on fraudulent appraisals.
Newton admitted he knew that the borrowers were not buying the properties as primary residences, and therefore did not qualify for the loans. Instead of notifying the lenders of the fraud, Newton advanced the scheme by falsely certifying to the lenders that the properties would be owner-occupied as primary residences.
Newton also allowed loan proceeds designated for certain closings to be used to fund other transactions, disguising the dual-use of the loan proceeds from the lenders.
As a result of the fraud, the lenders unwittingly advanced more than $1 million in loans to unqualified borrowers for the purchase of over-valued properties.
There may be charges against others as the investigation continues.
Posted 2:46pm by Chantelle Janelle
http://www.wistv.com/Global/story.asp?s=5356051