Two mortgage brokers operated a conspiracy in which they gave lenders false information to obtain loans used for speculative real estate investments in Charlotte, according to two federal civil lawsuits filed Wednesday.
False statements by Joshua Hankins and Scott Sopko resulted in the issuance of roughly $2.7 million in loans, according to the complaints brought by U.S. Attorney Anne Tompkins in Charlotte. The two men could be charged civil penalties for the alleged violations of the Financial Institutions Reform, Recovery and Enforcement Act of 1989.
According to court filings, applications for the loans were filed in 2006 and 2007. At the time, the housing bust had yet to come to Charlotte, and home prices were still going strong.
The loans were obtained from ABN AMRO Mortgage Group, BB&T, First Charter Bank and SunTrust Mortgage, according to the complaints. The loans were for properties on Magnolia Avenue, Springdale Avenue and East Worthington Avenue in the Dilworth area.
The case is the latest example of federal prosecutors targeting alleged mortgage fraud in the Charlotte region. In an unrelated investigation known as “Operation Wax House,” roughly 90 people have been arrested since 2007 and accused of stealing more than $75 million from investors and mortgage lenders. That federal probe has focused on mortgage and investment fraud in Mecklenburg and Union counties.
According to the lawsuits against Hankins and Sopko, their scheme involved multiple instances of misleading lenders into thinking a particular property would be their primary residence. Actually, documents say, they never intended to live on the properties. Rather, their plans were to sell the properties for a profit.
In one case, a Magnolia Avenue house was sold while it was under construction in 2007, documents say. In another case, loans for a Springdale Avenue property were believed to have been used to pay off loans from another lender.
Attorney Anthony Scheer, who is representing Sopko and Hankins, said none of the loans involved in the case were delinquent or caused any losses. He said his clients dispute the fraud accusations and “are working to resolve the issue.”
According to the lawsuits, penalties could total $1 million per false statement. In the case of a continuing violation, penalties could be as much as $5 million. Staff researcher Maria David contributed.