Two California men have been sentenced in a criminal case involving the theft of personal financial information of some customers who applied for home loans through Charlotte-based online mortgage marketplace LendingTree.
A federal judge on Tuesday sentenced Marcus Alan Avritt, 42, of Seal Beach, and Brian Matthew Rich, 40, of Laguna Beach, said Anne Tompkins, U.S. attorney for the Western District of North Carolina said Wednesday.
Their sentencing comes seven years after the two men and others launched the scheme to steal contact and other information for thousands of people across the U.S. applying for home loans through LendingTree’s online lender network, according to court documents.
LendingTree, which matches mortgage applicants with lenders, charges lenders fees for its leads. Matches are made after borrowers applying through LendingTree’s website submit personal information, such as Social Security numbers, to qualify for mortgages for home purchases, refinancing and home equity loans.
Lenders make offers to borrowers, who pick the best one.
The stolen leads were valuable because they were for consumers “who were ready, willing and financially able to close on (loans),” according to documents.
The scheme, which was investigated by the FBI and ran from 2007 to 2008, was created so that participants who were not on the LendingTree network could avoid paying the company fees for leads, court documents say.
Avritt and Rich, co-owners of California mortgage broker Chapman Capital, bought unauthorized access to LendingTree’s database of leads from another California mortgage broker, Steve Kenneth Rosene, according to court documents.
By stealing leads, Avritt and Rich avoided paying LendingTree about $745,152, prosecutors said. Chapman Capital also did business as Home Loan Consultants, according to prosecutors.
Rosene, who was president and part owner of Newport Lending Group, obtained the unauthorized access from a former LendingTree employee, Jarrod Beddingfield, documents show. Newport Lending Group was a lender on LendingTree’s network, court documents say.
Rosene and Beddingfield have pleaded guilty and are awaiting sentencing. Beddingfield was a LendingTree employee until 2007, according to court documents.
Avritt was sentenced to 15 months in prison, and Rich was sentenced to 24 months. The two pleaded guilty last year. They also have been ordered to pay restitution to LendingTree. The amount has not been determined.
LendingTree said Tuesday it reached out to affected consumers when it discovered the breach about six years ago.
Since then, “our information security technology has been significantly enhanced ... to ensure that we always have state-of-the-art information security protecting our consumers,” a company spokesperson said in an email.
LendingTree is part of Ballantyne-based Tree.com.