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Atlanta -- (February 12, 2008) -- Conspiracy Involved $6 Million in Fraudulent Loans in Just 10 Weeks
Atlanta, GA - Following a two-week trial, a jury in federal district court returned
guilty verdicts late yesterday against KEITH GARNER, 48, GREGG SAVAGE, 24,
SHALONDA HARRIS, 36, all of Atlanta, Georgia, and LATESHA GARNER, 27, of
Durham, North Carolina, on charges of conspiracy to commit mortgage fraud and wire fraud
related to $6 million in fraudulent real estate financing from SunTrust Mortgage Company
("SunTrust Mortgage") over a ten week period in the summer of 2006.
"The defendants' sheer greed is demonstrated by the fact that they obtained $6 million
in fraudulent mortgage loans from a single lender in just ten weeks," said United States
Attorney David E. Nahmias. "They were indicted several months after SunTrust Mortgage
discovered their scheme, however, and, following a two-week trial, the jury convicted each
defendant after only five hours of deliberation. Those who intend to commit mortgage fraud
should remain on notice that law enforcement may be looking over their shoulders, and those
who have committed mortgage fraud are once again reminded that juries in this district will
not tolerate their criminal conduct."
According to United States Attorney Nahmias and the information presented in court:
Defendant KEITH GARNER solicited his daughter, LATESHA GARNER, a loan processor
with SunTrust Mortgage, in the spring of 2006 to handle fraudulent loan applications
submitted on behalf of straw borrowers recruited by KEITH GARNER and his coconspirators.
Because she was responsible both for verifying borrower employment and
asset information as well as for approving closing documentation, LATESHA GARNER was
uniquely positioned to defraud SunTrust Mortgage, which she did by falsely verifying
borrower credentials and approving hundreds of thousands of dollars in false payoffs to her
father. KEITH GARNER paid LATESHA GARNER $33,000 -- a year's salary -- across four
transactions to facilitate his criminal scheme.
KEITH GARNER also recruited defendant SUSAN KHODADAD, a closing
paralegal with several area real estate firms, to ensure that the false payoffs to GARNER and
his co-conspirators were included in SunTrust Mortgage's loan documentation. Defendant
KHODADAD pleaded guilty to the conspiracy count of the indictment prior to trial and
testified against her co-conspirators.
Focusing on the “Country Club of the South” and other high-end developments and
subdivisions in the Atlanta area, KEITH GARNER and his co-conspirators acquired
numerous properties in the name of their straw borrowers, often without the straw borrower's
consent. Each of the properties was accompanied by an inflated appraisal, which, in addition
to the submission of false loan applications, enabled the defendants to secure real estate
financing from SunTrust Mortgage in excess of the fair market value of the properties. The
defendants then stole the “spread” between the inflated and fair market value of the
properties primarily through defendants LATESHA GARNER and KHODADAD, who
ensured that SunTrust Mortgage either directly paid a bogus seller's obligation or was never
made aware that a substantial portion of seller's proceeds was being paid to the defendants
outside of closing pursuant to a criminal agreement with the seller.
Defendant GREGG SAVAGE was convicted of realizing more than $830,000 in false
profits in just seven days as a seller of two properties, from which he paid KEITH GARNER
$200,000 for supplying the straw buyers. Defendant SHALONDA HARRIS, a licensed
realtor, was convicted of receiving $66,000 from defendants KEITH GARNER and
SAVAGE related to her role in locating properties and straw buyers on two indicted
transactions.
Each defendant faces a 20 year prison term and $250,000 fine on the conspiracy count
of the indictment and a separate 20 year prison term and $250,000 fine on each of their wire
fraud convictions. A sentencing date has not yet been scheduled before United States
District Judge Richard W. Story.
This case was investigated by Special Agents of the Federal Bureau of Investigation.
Assistant United States Attorneys Paul Monnin and Doug Gilfillan are prosecuting
the case.
SOURCE: United States Department of Justice - District of Georgia
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