Brent Merriell of Atlanta, Ga. has been sentenced by United States District Judge Jack T. Camp to federal prison on charges of making false statements to the Federal Deposit Insurance Corporation (FDIC) and aggravated identity theft. Merriell was sentenced to three years and three months in prison to be followed by five years of supervised release. Read more

Edward William Farley of Hoschton, Ga., was sentenced by United States District Judge Timothy C. Batten Sr. to serve 25 years in federal prison on charges of bank fraud and conspiracy involving mortgage fraud, a real estate investment Ponzi scheme with more than 100 victims, a check-kiting scheme and bankruptcy fraud. Walter Julius Hermann of Dunwoody, Ga., was also sentenced by Judge Batten to serve over two years in federal prison on charge of bank fraud involving real estate appraisals he submitted in the Farley mortgage fraud scheme.Read more

Bruce E. Karatz, former chief executive officer and chairman of the board of KB Home, has been convicted of four felony counts related to a stock option backdating scheme in which he awarded himself and other KB executives millions of dollars in undisclosed stock-based compensation. Karatz of Bel Air Estates, Calif. was found guilty of two counts of mail fraud, one count of making false statements in a quarterly report filed with the Securities & Exchange Commission (SEC), and one count of making false statements to KB’s outside accounting firm, Ernst & Young.Read more

The former chief executive officer and chairman of the board of Homestore.com has been sentenced to four-and-a-half years in federal prison for presiding over a scheme to commit securities fraud by artificially inflating the publicly traded company’s advertising revenue to appear to be more profitable to Wall Street analysts. Stuart Wolff of Westlake Village, Calif. was sentenced by United States District Judge Gary A. Feess, who ordered Wolff to begin serving his sentence by June 21.Read more

A Newport Coast, Calif. man who defrauded the U.S. Department of Housing & Urban Development (HUD) by fraudulently obtaining mortgage loans that went into default has been sentenced to five years in federal prison. Lorenzo Espinoza was sentenced by United States District Judge Stephen V. Wilson, who also ordered the defendant to pay HUD restitution of more than $614,000.Read more

Concluding a mortgage fraud case involving more than $4 million in losses at several banks, the fourth defendant convicted in the scheme has been sentenced to 85 months in federal prison. Terral Toole of Lake Elsinore, Calif. was sentenced by United States District Judge John F. Walter, who also ordered the defendant to pay $291,055 in restitution to three financial institutions.Read more

United States Attorney A. Brian Albritton has announced that U.S. District Judge Henry Lee Adams Jr. has sentenced Barry C. Westergom of Jacksonville, Fla. to four years in federal prison for conspiracy to commit wire and bank fraud. The court also ordered restitution in the amount of $866,141.62 and entered a money judgment for $100,000, the amount that Westergom had obtained from the fraud. Westergom had pleaded guilty on Oct. 8, 2009.Read more

The former president of Mortgage One Corporation in Hesperia, Calif. was sentenced to 13 years in federal prison for defrauding the U.S. Department of Housing & Urban Development (HUD) and private lenders by fraudulently obtaining hundreds of federally insured loans and selling those mortgages to private lenders in a scheme that caused tens of millions of dollars in losses to the federal housing agency.Read more

A former California-licensed real estate appraiser was sentenced to three years in federal prison and ordered to pay more than $46 million in restitution for her role in a massive mortgage fraud scheme that caused tens of millions of dollars in losses to federally insured banks. Lila Rizk of Rancho Santa Margarita, Calif. received the three-year prison term after her conviction last summer on conspiracy, bank fraud and numerous loan fraud charges.Read more

Jeffrey Todd Crandell, 33, of Mesa, Ariz., pleaded guilty on Nov. 9 to six counts of bank fraud for his role in a mortgage fraud scheme. Sentencing will take place Feb. 22, 2010, before U.S. District Judge G. Murray Snow. Crandell was the leader of a sophisticated cash-back mortgage fraud scheme.Read more