Rose speaks – Celebrity and High Profile Trials

He sold the condos to members of his family, organised the mortgages for 3 times the worth of the properties and then no payments were made on the mortgages from what I read..does mortgage insurance kick in or what??

Has it happened before and they got away with it???

I never ever thought these guys were straight and did I ever think it was all above board with Anna.. nope I think they tried to strong arm her and wanted her to pay more than the property was worth and probably do a mortgage through them with probably the same result as we are seeing in this case.

Last I heard of Gina she was working in a beauty salon for $$$ because they had none..

The Mortgage Daily????

Ford Shelley Jr. to plead guilty to mail fraud

http://www.mortgagedaily.com/Fraud/MctFordShelley103111.asp

Oct. 31, 2011

By DAVID WREN The Sun News – McClatchy-Tribune Information Services

Ford Shelley Jr. — the local developer whose acquaintance with the late Playboy model Anna Nicole Smith helped fuel a media circus following her death — has agreed to plead guilty to a felony charge of mail fraud related to allegedly falsified mortgages he helped to arrange for his Pineapple Bay condominium project in Myrtle Beach.

Shelley, the son-in-law of former Smith boyfriend Ben Thompson, signed a plea agreement earlier this month that was filed in federal court last week.

Even though he has agreed to plead guilty, Shelley said he is the innocent victim of a mortgage broker who misled him about the legality of a loan program that Shelley used to sell the condos.

Neither Shelley nor his lawyer identified the mortgage broker.

“During the height of the real estate market, a mortgage broker contacted him about a loan program and assured him it was legitimate,” said Gene Connell, a Surfside Beach lawyer who — along with Florence lawyer Brown Johnson — is representing Shelley in the criminal case.

“Shelley learned portions of the loan program were illegal long after the transactions occurred,” Connell said. “Shelley did not knowingly violate the law.”

Connell said Shelley has agreed to plead guilty because mail fraud is a strict liability charge in which intent is irrelevant. Prosecutors would not have to prove that Shelley knew the loan applications he mailed to banks were fraudulent, only that he mailed them.

“Just the fact that it happened is what matters,” Connell said.

John Potterfield, the assistant U.S. attorney who is prosecuting the case, said he cannot comment until after a plea is officially entered during a court hearing.

The mail fraud charge carries a maximum sentence of 20 years in prison and a $250,000 fine followed by up to three years of supervised release. No hearing date has been scheduled.

Shelley, in court documents, admitted that he agreed to pay the buyers at Pineapple Bay “large sums of money” after the sales were completed. The documents do not say how much money Shelley paid to the buyers; however, he did not disclose those payments on loan documents as required by law. Federal prosecutors say Shelley also delivered loan packages to banks that contained false, misleading and fraudulent information, according to court documents.

Most of the buyers at Pineapple Bay included Shelley’s family — including Shelley’s wife, Gina, and his brother-in-law and sister-in-law — and friends or business associates. All but one of the condo loans wound up in foreclosure and most of the buyers never made a payment on the mortgages, real estate and court documents show.

Shelly is charged with one count of mail fraud, however, real estate and court documents show similarities between most of the initial mortgages made between 2006 and 2008 on the 12-unit Pineapple Bay project at 7001 Porcher Drive.

The sale price for each of the 2,250-square-foot condos ranged from $625,000 to $700,000, according to county property records.

Shelley — doing business as Fruits of My Labor LLC — sold half of the condos to family members. Connell said the buyers had hoped to flip the condos for a profit.

“This was a period of time when people were selling condos at enormous prices,” he said. “Everybody was looking to flip them.”

When the real estate crash hit, however, the buyers were stuck with the condos and mortgages for more than their property was worth.

Court documents show Shelley, his family members and others defaulted on mortgages totaling nearly $5.8 million.

Pineapple Bay condos now are selling for a fraction of their original prices. For example, property records show one unit sold for $155,000 in May and another sold for $135,000 in April.

Meanwhile, Shelley is close to a settlement in a civil lawsuit filed against him in 2008 by Howard K. Stern, the executor of Smith’s estate. Stern accuses Shelley and his family members of taking Smith’s computer equipment, videos and personal belongings from a home in the Bahamas where the Playboy model had been staying when she died in February 2007. Thompson owned the home and he and Shelley had been in the process of evicting Smith when her death occurred, according to court documents.

Shelley became acquainted with Smith in 2005 when Thompson dated the Playboy model for a brief time and later allowed her to move into his Bahamas home.

Stern, in the lawsuit, said Shelley and the others profited from selling Smith’s videos and belongings to the media after her death. Smith has asked for unspecified actual and punitive monetary damages. A document filed in federal court last week, however, states that Stern, Shelley and the others expect to settle the case out of court early next year. Stern has asked the court that terms of any settlement be sealed.

Shelley declined to comment on the Stern lawsuit when contacted last week.

Rose it always made me think Ford Shelley was the one with his knickers in a twist over Anna, not his father in law…it was always way too personal the attacks and belittling.. and given the fullness of time went to zip..you have to ask what was their long term end game…I don’t think they thought it would bite because who would dare…um Howard did dare..hope they finally got the stuff back and got the money those idiots made from stealing Anna’s stuff.

I mean the arsholes stole from a baby…

Crackdown Yields Charges on $21.2 Million in Mortgage Fraud

http://www.mortgagedaily.com/Fraud/MctFraudCrackdown110711.asp

Myrtle Beach area mortgage fraud probe accelerating

Nov. 7, 2011

By DAVID WREN The Sun News – McClatchy-Tribune Information Services

A crackdown on mortgage fraud in the Myrtle Beach area — announced by federal officials nearly 11/2 years ago — has netted nearly two dozen indictments and guilty pleas thus far, and prosecutors say more charges will be forthcoming.

The real estate agents, developers, bankers, mortgage brokers and home buyers who have been charged locally are responsible for more than $21.2 million in bank losses, according to court documents. In addition to the criminal charges, RBC Bank has filed three civil lawsuits against nearly 60 lawyers, developers, real estate agents, appraisers and others claiming their negligence and fraudulent activities led to $10 million in bank losses.

However, experts say the fraud uncovered so far is just a small sample of what took place during this area’s real estate boom in the middle part of the last decade.

“I don’t think they’ve scratched the surface as far as what they could indict,” said Russell Mace, a Myrtle Beach lawyer who specializes in mortgage fraud and criminal defense law. “Just think of all the homes and condos here that are empty right now and no payments were ever made on them. The FBI agents here have their hands full.”

Mace, who has represented some of those charged with mortgage fraud in this area, said he expects more indictments in coming months as those charged with crimes start cooperating with investigators and providing information about others involved in similar schemes.

“This is not the end of it, but it’s a gradual process,” he said, adding that the paperwork trails investigators must follow can be daunting.

Bill Nettles, the U.S. attorney for South Carolina, announced federal investigators’ increased focus on mortgage fraud during a news conference in June 2010 that coincided with the national Operation Stolen Dreams investigation. Nettles pointed to the Myrtle Beach area as a hotbed of fraudulent activity, and he hired a special prosecutor — John Potterfield — to handle only real estate-related crimes. Potterfield told The Sun News last week that there remains plenty of work to do.

Among the most recent court actions:

–Alissa Smith — a real estate sales agent — and her husband, Jim Putnam, agreed on Friday to plead guilty to felony charges of conspiracy to defraud the United States.

Smith’s charge involves a $265,000 payment her company — Casa Mia LLC — received from the sale of a condominium at 704 S. Ocean Blvd. in North Myrtle Beach. That payment, which was listed on the federal HUD-1 loan form, was based on a fraudulent invoice, according to prosecutors.

Putnam’s charge involves a $36,500 payment his Celebrity Vacations LLC received from the sale of a condominium at 507 S. Ocean Blvd. in North Myrtle Beach. That payment, which was listed on the federal HUD-1 loan form, was based on a fraudulent invoice, according to prosecutors.

The conspiracy charge carries a maximum sentence of five years in prison and a $250,000 fine.

–Four more area residents have been charged with conspiracy to commit wire fraud as part of an ongoing investigation into the Pineapple Bay condominium project at 7001 Porcher Drive in Myrtle Beach.

Linda Audino, Anthony Audino and Gaither B. Thompson II have been indicted on the charges and are awaiting arraignment hearings on Wednesday in Florence. In addition, Michael Sichitano has agreed to plead guilty to the conspiracy charge. All four are facing maximum sentences of 30 years in prison and a $1 million fine.

The charges follow Pineapple Bay developer Ford Shelley’s agreement last month to plead guilty to one count of mail fraud related to the alleged mortgage scheme. Shelley — who is expected to enter a guilty plea during a Nov. 29 hearing — also faces a maximum sentence of 30 years in prison and a $1 million fine.

Shelley sold most of the condos to family members, friends and business associates, according to court documents.

Thompson, who is Shelley’s brother-in-law, purchased one of the condos for $625,000 in November 2006. Linda Audino — a business associate of Shelley and a real estate agent at the time — and her husband, Anthony, purchased two condos in November 2006 for $625,000 apiece. No payments were made on the mortgages and all three condos wound up in foreclosure.

Sichitano, another business associate of Shelley, bought one condo for $625,000 in November 2006.

Prosecutors say Shelley promised each of the buyers a cash kickback following their condo purchases. Those payments from Shelley were not disclosed on loan documents as required by law.

–John Warner, a partner in Warfin Developers LLC, has agreed to plead guilty to a charge of conspiracy to defraud the United States. Prosecutors say Warner failed to disclose a $225,679 kickback to a home buyer on a federal HUD-1 loan statement. The alleged kickback took place during a Feb. 1, 2008, real estate transaction for a home in Garden City Beach. Warner is expected to enter a guilty plea during a Nov. 30 hearing. The conspiracy charge carries a maximum sentence of five years in prison and a $250,000 fine.

–Theron Floyd, the owner of Trinity Development LLC, has consented to a judgment in one of the civil cases filed by RBC Bank, according to a court filing last week. Floyd admits that he sold two Garden City Beach homes to out-of-state straw buyers in 2008, costing the bank $925,000 in defaulted loans, according to court documents. RBC Bank plans to file a judgment against Floyd for that amount and has asked a judge for permission to drop him as a defendant in the case.

Wings owners to be interviewed in Pavilack case

The trustee in Myrtle Beach lawyer Harry Pavilack’s bankruptcy case is going to interview Shaul Levy and Meir Levy — the owners of the Wings chain of beachwear stores — to see what they know about Pavilack’s business dealings. A federal judge last week gave trustee Robert Anderson permission to hold Rule 2004 examinations with the Levys. Such examinations are similar to depositions given in civil cases and Anderson has called them “fishing expeditions” to find assets.

The Levys obtained a $2.5 million judgment against Pavilack in February 2010 — money the beachwear store owners say Pavilack owes them from a failed condominium project. Pavilack told bankruptcy court officials that he started using cash almost exclusively after that judgment was filed in an effort to keep the Levys and other creditors from attaching his bank accounts.

So far, 271 creditors have filed claims totaling $72.3 million against Pavilack in his Chapter 7 liquidation case. Most of the debt was backed by real estate that has since declined in value.