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Two sentenced to prison in $37 million mortgage fraud case

Neighborhoods in Mecklenburg, Union counties targeted

Two mortgage fraud promoters accused of generating more than $37 million in fraudulent loans have been sentenced for their roles in a conspiracy that targeted neighborhoods in Mecklenburg and Union counties.

Kenneth Egri, 55, of Charlotte was sentenced to 6 1/2 years in prison. Dean Huffman, 57, formerly of Charlotte, was sentenced to five years and five months.

U.S. District Judge Frank Whitney ordered Egri and Huffman to pay $1,335,744 in restitution to Bank of America. The judge also ordered Egri to pay $257,721 in restitution to the Internal Revenue Service.

“The defendants exploited the American Dream of home ownership in order to satisfy their own selfish greedy interests,” said U.S. Attorney Anne Tompkins.

Egri and Huffman pleaded guilty in July 2011 to conspiracy to commit wire fraud in connection with a mortgage fraud that primarily targeted the Providence Downs neighborhood in Union County. Egri also pleaded guilty to two counts of failing to file income tax returns for 2005 and 2006.

Federal prosecutors said Egri and Huffman, who owned and operated Direct Home Services in Charlotte, used the company to generate more then $37.4 million in fraudulent loans and to funnel more than $5.4 million to themselves.

Prosecutors said Egri and Huffman, to promote their scheme, would agree with a builder to purchase a property at the “true price.” They would then arrange for a buyer to purchase the property at an inflated price – usually between $100,000 and $300,000 above the true price.

The buyer in most circumstances would agree to purchase the property in his or her own name and sign whatever documents were necessary in exchange for a kickback. The builder would sell the property at the inflated price and the lender would make a mortgage loan on the basis of that inflated price.

Prosecutors said Egri and Huffman would pocket the difference between the inflated price and the true price at closing.

Wright: 704 358-5052
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