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A Matthews builder is the ninth person who has agreed to plead guilty in a mortgage fraud scheme that involved seven pricey Mecklenburg and Union County neighborhoods.
Gary Mark Wood, the owner of Gary Wood Construction, built three Waxhaw homes, which he and "co-conspirators in Mortgage Fraud Cell No. 4" sold at inflated prices of more than $1.2 million each, according to federal court documents filed last week. Cell members received more than $800,000 from the deals, the U.S. Attorney charged.
Two houses have since been lost to foreclosure and resold for less than half the deal prices, the documents say.
Wood, charged with one count of mortgage fraud conspiracy, did not return a call on Monday. He faces a fine of as much as $250,000 and up to five years in prison.
His company's license is listed as invalid on state records, and his attorney, Lane Williamson, said Wood is unemployed.
"He's accepting responsibility," Williamson said of his client's agreement to plead guilty.
Woods' involvement in the scheme was the "product of economic desperation," as he found himself unable to sell houses in a slowing economy, Williamson said. He was approached by people doing such deals and agreed to join.
Participants in this and related cases agreed to buy homes at one price from builders, arranged buyers at a higher price and lied to get mortgages at the higher level, according to court documents. Prices were generally inflated by $200,000 to $500,000. At closing, the difference between the two prices was shared by cell members.
Williamson said Wood didn't share in the excess distribution, but he was aware of it. For him, the benefit was that he could sell houses that weren't moving.
Wood's case provides the most deal details of any case yet. Court documents show:
In April 2007, he sold a house on Clover Vale Drive in Waxhaw's Skyecroft neighborhood for $1.25 million. Nearly $300,000 in loan proceeds was fraudulently distributed to shell companies controlled by cell members. The house sold for $626,000 after foreclosure.
In July 2007, he sold a Skyecroft house on Skye Lochs Drive, for $1.4 million. Cell members received $324,000.
Also in July 2007, he sold a house on Smarty Jones Drive in Providence Downs South for $1.3 million, generating $182,000 for participants. The house resold following foreclosure for $607,500.
Prosecutors in the "Waxhouse Investigation" of more than a year have identified a total of five mortgage fraud cells, operating in 2006 and 2007 in Mecklenburg and Union counties. Wood's deals were in two neighborhoods also identified in other cases as primary targets of the fraud operators. The others are Woodhall, Chatelaine, Firethorne, Stratford on Providence and Piper Glen.
None of the eight people who have agreed to plead guilty since last November have yet been sentenced.
