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Nine Sentenced in Alaska’s Largest
Mortgage Fraud Investigation
California
Man
Pleads
Guilty in $12.6
Million Missouri
Mortgage
Fraud Scheme
ANCHORAGE, AK-United States Attorney Karen L. Loeffler announced that on
August 21, 2009, lead defendant Lance Lockard was sentenced to 70 months in
prison for his leadership of a large-scale mortgage fraud scheme.
Lockard was the ninth and last defendant to be sentenced for his role in the
largest mortgage fraud investigation in Alaska’s history. In total, nine
individuals and one corporate defendant were convicted and sentenced for their
roles in a widespread, three-year long scheme to defraud some 13 mortgage
lenders and banks in 57 different loan transactions netting over $1,700,000 in
profits and over $2.5 million in losses to the financial institutions. United
States District Court Judge Ralph Beistline, who presided over the case,
sentenced the nine defendants to a total of 14 and ½ years of imprisonment, and
imposed fines of over $90,000 and restitution of over $2.5 million dollars.
The defendants convicted as a result of the scheme are: Lance Lockard, of
Anchorage, age 34, Gary Paterna, of Anchorage, age 62, Charles Carlson, of
Anchorage, age 74, Holli Stroud, of Chugiak, age 30, Jonathan Ruf, of Anchorage,
age 33, Keith Facer, of Anchorage, age 41, Don Murray, of Anchorage, age 35,
Cerise Sanders, of Anchorage, age 31, and Alaska State Mortgage Company, Inc.,
of Anchorage.
Lockard, a licensed real estate investor and the lead defendant pled to 64
counts and was sentenced to 70 months and ordered to pay 2.5 million in
restitution. Lockard also admitted the forfeiture allegation in an additional
count, forfeiting his interest in $116,000 held in an investment account under
his name. Charles Carlson, a licensed real estate appraiser, was sentenced on
July 11, 2009, to 24 months and to pay restitution of $2,360,185. Holli Stroud,
a title company loan closer, was sentenced on June 25, 2009, to 18 months and to
pay restitution of $403,733.60. Keith Facer, a licensed real estate agent, was
sentenced on May 29, 2009, to 16 months and to pay restitution of $221,065.24.
Don Murray, a licensed real estate agent, was sentenced on May 19, 2009, to 21
months and pay restitution of $493,868.77. Cerise Sanders, a loan originator,
was sentenced on May 19, 2009, to 12 months and one day. Jonathan Ruf, was
sentenced on May 28, 2009, to 12 months and one day and to pay restitution of
$1,066.390. Gary Paterna. Mr. Lockard’s father-in-law, was sentenced on May 18,
2009, to three days in jail and pay restitution of $1,162,884.86. Alaska State
Mortgage, a local mortgage company, was sentenced on May 13, 2009, to a fine of
$91,478.53. The defendants pled to a total of 64 counts charging conspiracy,
wire fraud, bank fraud, and false statements to a financial institution.
The pleas and sentencing bring to a close the largest mortgage fraud scheme
ever prosecuted in the District of Alaska. The fraud was perpetrated by
professionals in all areas of the real estate industry. Between on or about
December 23, 2003, and May 31, 2006, Lockard and his co-defendants arranged to
purchase and sell real estate in Alaska, and to obtain mortgage loans for the
purchase and sale of that real estate, through a series of fraudlent schemes
that relied upon false and fraudulent statements, inflated appraisals, falsified
down payments, nominee borrowers and purchasers, hidden cash-back payments and
other improper practices that concealed the true details of the financial
transactions from the mortgage lenders involved. The effect and result of this
conduct was to transfer the investment risk from Lockard and the other
co-conspirators to the mortgage lenders and to provide inflated profit and
fraudulently obtained loan funds to Lockard and the other co-conspirators. The
charges in the indictment to which the defendants pled guilty outlined a total
of five separate schemes, involving properties in numerous Anchorage
subdivisions, and two large undeveloped properties in the Talkeetna area.
According to the indictment, in the first scheme, Lockard, Paterna, his
father-in-law, Carlson, the appraiser and Stroud, the loan closer, arranged for
fraudulent loan documentation on the purchase of 10 properties. The indictment
alleges that Lockard arranged for the simultaneous purchase and sale of the
properties using Paterna as a nominee purchaser and that Carlson inflated the
appraisals of the properties with Stroud falsifying the closing documents to
conceal the fact that no down payments had been made.
The second scheme in the indictment charges that Lockard and Ruf with the aid
of Carlson, Stroud and Cerise Sanders, and Alaska State Mortgage Company as loan
originators arranged for Ruf, acting as a nominee for Lockard, to purchase13
separate properties on the same day, with all purchases fraudulently listed as
purchases of his primary residence by Sanders and McCready acting for Alaska
State Mortgage. According to the indictment, Carlson and Stroud, as in scheme
one, inflated the appraisals and falsified loan closing paperwork. The
indictment further alleges that the defendants, acting on behalf of Lockard sold
the properties obtained through the fraudulent loans listed in schemes one and
two to third-party buyers using further inflated appraisals provided by Carlson
and illegal cash-back payments to the buyers aided by real estate agents Keith
Facer and Don Murray to induce them to purchase the overpriced properties.
The indictment further alleges that Lockard, Stroud, Carlson, Ruf and Paterna
engaged in similar fraud involving two other property purchases. It charges that
Stroud and Lockard with the aid of an inflated appraisal provided by Carlson,
arranged for Stroud to purchase a property with a falsified down payment. It
further charges that Lockard, Paterna, Carlson, Stroud and Ruf again used
nominees and falsified loan paperwork in a purchase financed by FNBA. Finally,
the indictment alleges that Lockard engaged in a “bust out” scheme by purchasing
properties with the aid of Paterna, Ruf and Carlson, at inflated prices with the
purpose of taking the loan proceeds and defaulting immediately on the loans.
At Friday’s sentencing hearing, Judge Beistline concluded that Lockard was an
organizer and leader of the criminal activity, that he had fraudeulently
obtained more than $1 million in gross proceeds from the First National Bank of
Alaska, and that his crimes caused total losses of approximately $2.5 million
dollars. Judge Beistline commented that Mr. Lockard’s crimes were motivated by
greed and had an impact on our community. In addition to the financial
institutions that were defrauded, one of the individual victims testified at
setencing about his personal financial losses, and his struggles to pay the
mortgages on three duplexes he had unwittingly purchased for grossly inflated
prices. Judge Besitline admonished that there was “no excuse for lying and
deception, and no excuse for breaking the law,” and that Mr. Lockard was going
to have to “face the consequences of the very poor choices he made.”
United States Attorney Karen L. Loeffler noted that these convictions and
sentences point out the vast harm that can be done to an industry and the public
when a handful of dishonest individuals are willing to falsify the documents and
information on which the mortgage market relies.
Ms. Loeffler also commended the diligent and extensive investigation by
special agents of the Federal Bureau of Investigation for their investigation
that lead to this result. |
