In the following press release George E.B. Holding, United States Attorney for the Eastern District of North Carolina announced that two women, KELLEY ANNE SPAULDING, 38, of Durham, North Carolina, and ELIZABETH WHITAKER CLEMENT, 46, of Raleigh, North Carolina have pled guilty to conspiring to commit wire fraud, in violation of Title 18, United States Code, Section 371. A third co-conspirator, WILLIAM MONTELLE LOYD, III, 56, of Raleigh, North Carolina, was charged by an 18-count Criminal Indictment returned by a Federal Grand Jury on June 4, 2008. LOYD has been charged with one count of conspiring to commit wire fraud, in violation of Title 18, United States Code, Section 371; nine counts of wire fraud and aiding and abetting, in violation of Title 18 United States Code, Section 1343; six counts of mail fraud and aiding and abetting, in violation of Title 18, United States Code, Section 1341; and two counts of aggravated identity theft, in violation of Title 18, United States Code, Section 1028A.

According to the Indictment, LOYD, SPAULDING, and CLEMENT entered into an agreement to defraud E-Loan, an Internet-based financial services company located in Pleasanton, California, that offers to the public mortgages and other types of consumer loans. Multiple mortgage loans from E-Loan were obtained by submitting documents containing false statements regarding the buyer’s personal income and employment history. On October 3, 2003, and October 6, 2003, SPAULDING and LOYD faxed a fraudulent pay stub and a W-2 Form, respectively. The pay stub indicated a false year-to-date income of $185,225 while the W-2 Form indicated an annual salary of $283,381, that defendants knew was false. On November 13, 2003, and November 22, 2003, SPAULDING and LOYD submitted signed loan applications, one of which gave a false monthly salary of $20,580.55.

On May 15, 2003, and June 15, 2003, CLEMENT and LOYD faxed a W-2 Form and a pay stub, respectively, to E-Loan, both of which were fraudulent. The year-to-date salary on the pay stub indicated the false amount of $73,077.64. Finally, on June 25, 2003, CLEMENT and LOYD submitted a signed loan application stating employment and monthly income information, which were known by defendants to be false.

CLEMENT and SPAUDLING were charged by Bills of Information filed on May 27, 2008 and June 2, 2008, respectively. Conspiring to commit wire fraud, exposes a defendant to five years’ imprisonment, a $250,000 fine and/or both, and three years supervised release following their terms of imprisonment. LOYD additionally faces up to 20 years imprisonment and/or a fine of up to $250,000, and up to three years supervised release for wire fraud and mail fraud. For the charges of aggravated identity theft, LOYD could receive two years imprisonment consecutive to any other sentence imposed, a fine of up to $250,000, and up to one year supervised release.

These cases are in connection with last week’s nationwide operation entitled Malicious Mortgage, in which more than 400 individuals have been charged with violations relating to mortgage fraud.

Mr. Holding said, “Stopping mortgage fraud is a top national priority of the Department of Justice. Here, in the Eastern District of North Carolina, we are continuing to focus on this problem to protect the integrity of our financial and housing markets.”

An Indictment and/or Information contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.

Investigation of the case was conducted by the Federal Bureau of Investigation. Assistant United States Attorney Felice McConnell Corpening served as prosecutor for the government.

Update on Wednesday, January 7, 2009 at 8:46AM by The Editor - Ian Shuter - ACFE, DMS

In the following press release George E.B. Holding, United States Attorney for the Eastern District of North Carolina announced that in federal court here on October 6, 2007 William Montelle Loyd, III, before United States District Judge James C. Dever, III, to conspiracy to commit mail fraud and wire fraud, in violation of Title 18, United States Code, Section 371, and aggravated identity theft, in violation of Title 18, United States Code, Section 1028A.

A Federal Grand Jury returned a Criminal Indictment on June 4, 2008. From November, 2002, through December, 2006, LOYD, entered into a conspiracy with Elizabeth W. Clement and Kelly Anne Spaulding to obtain 16 [mortgage] loans from E-Loan worth approximately $2.6 million by submitting false documentation regarding employment, salary, appraisals, and tax information during the course of securing the loans.

The investigation revealed that LOYD utilized his father’s and his brother’s identities and social security numbers to obtain loans in their names without their authorization or knowledge.

The maximum penalty for the charge of wire fraud conspiracy is up to five years imprisonment followed by three years of supervised release and a fine of up to $250,000. For aggravated identity theft, the maximum penalty LOYD faces is two years consecutive to any other sentence imposed followed by one year of supervised release and a fine of up to $250,000.

Investigation of the case was conducted by the Federal Bureau of Investigation. Assistant United States Attorney Felice McConnell Corpening served as prosecutor for the government.

Update on Wednesday, January 7, 2009 at 8:52AM by The Editor - Ian Shuter - ACFE, DMS

On December 18, 2008 United States Attorney George E.B. Holding announced that in federal court United States District Judge Terrence W. Boyle sentenced ELIZABETH WHITAKER CLEMENT, 56, of Raleigh, North Carolina, to 36 months’ imprisonment followed by three years supervised release. The Court also imposed restitution in the amount of $593,601.32.A Criminal Information was filed on June 2, 2008, charging CLEMENT with conspiring to commit wire fraud. On June 23, 2008, CLEMENT pled guilty to the charge. From October, 2002, to February, 2006, CLEMENT along with others, through fraudulent means, obtained multiple loans from E-Loan, Inc., an Internet-based business in Pleasanton, California, that offers to the public mortgages and other types of consumer loans. On May 15, 2003, knowing it to be false, CLEMENT faxed a fraudulent W-2 Form to E-Loan. On June 15, 2003, CLEMENT, and others, faxed a fraudulent pay stub to E-Loan which indicated a year-to-date salary of $73,077.04, which CLEMENT knew to be false. On June 25, 2003, CLEMENT, and others, signed and submitted a loan application to E-Loan falsely indicating her employment and monthly income.

Update on Wednesday, February 25, 2009 at 9:08AM by The Editor - Ian Shuter - ACFE, DMS

The Triangle Business Journal is reporting that according to the U.S. Attorney’s office in Raleigh, William Loyd has been sentenced to 84 months in prison for his role in this mortgage fraud scheme.

William Montelle Loyd III, 56, also faces three years of supervised release and must pay restitution in the amount of $1.26 million.

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