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Former Charlotte lawyer pleads guilty to mortgage fraud charges

By Elisabeth Arriero
earriero@charlotteobserver.com

A former Charlotte lawyer pleaded guilty in the middle of her trial this week to mortgage fraud-related charges, federal prosecutors announced Friday.

Michelle V. Mallard’s guilty plea is the latest conviction in Operation Wax House, a mortgage fraud investigation that began in 2007 and has netted 91 defendants. Seventy-two have pleaded guilty.

Mallard, 46, pleaded guilty to mortgage fraud conspiracy, money laundering conspiracy and embezzlement. She faces a maximum prison term of 70 years.

Federal prosecutors said Mallard was charged with embezzlement and serving as a mortgage fraud lawyer for a mortgage fraud cell in Operation Wax House.

Mallard agreed to use her law license to further mortgage fraud primarily in south Charlotte and Waxhaw, prosecutors said the evidence at trial showed.

The co-conspirators purchased houses at inflated prices in exchange for large kickbacks paid with the difference between the true price and the inflated price, according to the trial testimony.

Prosecutors said witnesses testified that Mallard agreed to pay kickbacks to other members of the conspiracy and, among other things, accepted bogus checks to make it appear as though buyers had provided money when they had not.

Prosecutors alleged that Mallard participated in the mortgage fraud after having stolen more than $30,000 from clients by embezzling from her trust account.

Mallard’s trial in federal court began on July 8.

After prosecutors presented their evidence earlier in the week, Mallard told Chief U.S. District Judge Frank Whitney on Wednesday that she wanted to change her plea to guilty on all the counts.

After pleading guilty, Mallard was released on bond pending her sentencing hearing.

Arriero: 704-358-5945; Twitter: @earriero
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