Attorney General Thurbert Baker and Gwinnett Police Chief Charles Walters announced today the arrest of four members of a mortgage fraud ring last Friday during a successful sting operation coordinated between the Office of the Attorney General and units from the Gwinnett Police Department. Those arrested were: Tara Webb for one count of mortgage fraud, Jim Price for one count of mortgage fraud, Charlie Smith for three counts of mortgage fraud, and Jason Brenner for three counts of mortgage fraud. Georgias new mortgage fraud statute (O.C.G.A. ï¿½16-8-100 et seq.), signed into law on May 5, 2005, provided the basis for the charges filed against the four defendants. This new law, drafted by the Attorney General during the 2005 legislative session, marks the first law in the country that specifically defines mortgage fraud as a crime and allows law enforcement to prosecute individuals for fraudulent activity prior to a lending institution being defrauded out of loan proceeds or a legitimate seller being defrauded out of clear title to his home as part of the fraud.
The criminal activity first came to the attention of law enforcement personnel when a real estate closing attorney noticed that loan documents submitted to a lender in conjunction with a mortgage application did not look right. After a preliminary investigation by the Office of the Attorney General and officers from the white collar crime unit of the Gwinnett Police Department, arrangements were made to conduct a sting operation during the scheduled real estate closing on Friday, May 27, 2005. The four defendants were all present at the closing and provided a number of documents to the closing attorney that contained fraudulent representations and omissions. At the conclusion of the closing, the four defendants were arrested by units of the Gwinnett Police Department. While the real estate that was to be the subject of the mortgage fraud was located in Fulton County, the defendants were charged in Gwinnett County because that is where the closing took place. Each count of mortgage fraud carries a penalty of one to ten years in prison and up to a $10,000.00 fine. The Attorney General anticipates additional charges being filed against these defendants in conjunction with mortgage fraud on other properties discovered during the course of the investigation.
In announcing the arrests, Attorney General Baker stated, Mortgage fraud is an epidemic in Georgia that not only affects lending institutions through fraudulent loans, but affects every Georgian through higher interest rates and inflated property values used in determining neighborhood tax values. In addition, many homes which are the subject of fraud end up abandoned or worse, occupied by drug dealers or vagrants in the midst of middle class neighborhoods. These arrests may be the first under Georgias new mortgage fraud statute, but they most certainly will not be last as we seek to end this criminal blight on Georgias neighborhoods.
Assistant Attorney General David McLaughlin and Gwinnett Police Sergeant Bill Jack spearheaded the investigation that led to these arrests.