GREENVILLE, NC (WECT) – Three men, one of whom is a former attorney from Columbus County, pleaded guilty in court Tuesday to their involvement in a construction loan and mortgage fraud conspiracy.
According to a news release from a spokesperson with the U.S. Attorney's Office, 50-year-old Robert Harold Melville of Lake Waccamaw, 46-year-old Michael Thomas Bartlett of Myrtle Beach, SC and Justin Lee Rooks, 31, of Loris, SC, pleaded in front of Senior United States District Judge Malcolm J. Howard.
Rooks and Bartlett pleaded guilty to conspiracy to commit mail, wire, and bank fraud, while Melville pleaded to conspiracy to commit bank and wire fraud.
The following is how the news release outlined the allegations leading up to the three men being charged:
The criminal information in the case against ROOKS and BARTLETT alleges that between May of 2004 and August of 2008 ROOKS, BARTLETT, and others conspired to defraud banks and lenders in connection with the purchase, development, and resale of properties in Columbus, Brunswick, and New Hanover counties.
It is further alleged that the conspirators solicited individuals at seminars in Raleigh and elsewhere to allow construction loans to be obtained in the names for the benefit of the conspirators in exchange for cash. The conspirators told the buyers that the buyers would not have to make a down payment or interest payments on the loans, and that the properties purchased in their names would be sold within twelve months. If the property could not be sold in twelve months, the conspirators were supposed to buy the properties back.
The conspirators in fact enticed the buyers to participate in the transactions and engaged in various actions to make it appear to the banks and lenders that the buyers were qualified for the loans. Among other things, the information alleges that the conspirators deposited money into the bank accounts of the buyers to make it appear that they had sufficient assets to conduct the transactions. To close the loans, the conspirators also referred the buyers to MELVILLE, who was at that time a North Carolina attorney who practiced real estate law. MELVILLE participated in the conspiracy by engaging in actions that made it appear to the banks and lenders that the buyers had given down payment money at the time of closing when, in fact, the buyers did not bring such money.
The banks and lenders who loaned funds to the buyers were not informed of the cash kickbacks to the buyers by the conspirators. The banks and lenders were also not informed that the buyers did not in fact have the cash to close the transactions, and that the down payment money, if any, was provided by the conspirators.
Ultimately, according to the Informations, the conspirators were unable to sell many of the properties purchased in the names of the buyers. The buyers did not have the means to repay all of the loans obtained in the names of the buyers and, as a result, many of the loans went into default. The banks and lenders were forced to sell the properties at a loss, resulting in substantial losses.
Following their pleas, the men are scheduled to be sentenced in March 2013.
They each face a maximum of 30 years in prison, up to $1 million in fines, mandatory restitution and three years of supervised release.
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