Hattiesburg man gets house arrest, probation for mortgage fraud
Published 4:41 pm Friday, December 1, 2006
A man who pleaded guilty in a mortgage flipping scheme has been placed on six months house arrest and three years probation by a federal judge in Hattiesburg.
Malcolm Clark, 35, of Hattiesburg pleaded guilty to one count of wire fraud before his trial was scheduled in October. He was sentenced this week in U.S. District Court.
Clark was indicted in the mortgage flipping scheme, in which principal defendants Richard Lucas, Kimberly A. Castle and Kenneth A. Stalnaker were accused of an elaborate scheme in which distressed properties were inaccurately appraised to convince buyers to obtain mortgages to buy the homes at inflated prices.
The defendants, prosecutors said, pocketed the difference between the home’s actual value and its inflated purchase price.
Lucas, Castle and Stalnaker were convicted of bank fraud and conspiracy to commit bank fraud. Those charges were later dropped because the institutions defrauded aren’t insured by the Federal Deposit Insurance Corp.
Lucas and Castle stand convicted of money laundering and wire fraud; Stalnaker also remains convicted of wire fraud.
They are expected to be sentenced in February.
Clark, an associate of Lucas, testified against the three.
In addition to his probation and house arrest, Clark must make restitution to the companies defrauded in the mortgage flipping scheme — $132,267 to Country Wide Home Loans, $21,612 to United Guarantee Residential Insurance Company and $17,894 to PMI Co.
Thirteen suspects were charged in the mortgage fraud scheme. Ten of those pleaded guilty to bank and wire fraud.
The suspects who pleaded guilty before the trial began in addition to Clark were: Phillip Weary, William V. Fairley, Jafus Jones, Kenneth Fairley Jr., Kristy Packer, Marcy Irby, Loretta Joy Champ, Michael Cox and Jacqueline Mosley.