Nathan Shane Wolf, 44, of Charlotte, was sentenced Wednesday to seven years in prison and three years of supervised release, a U.S. Department of Justice (DOJ) release stated. John Wayne Perry Jr., 34, of Charlotte, was sentenced Thursday to two years in prison and two years of supervised release. And Purnell Wood, 44, of Palmyra, New Jersey, on July 31 received a 21-month sentence and two years of supervised release.
The vast mortgage fraud conspiracies bilked investors, financial institutions and lenders out of more than $75 million. Its victims also included doctors, lawyers and professional athletes.
Wolf, a licensed real estate broker, was convicted in October 2013 for helping to fraudulently obtain more than $13 million in loans, the DOJ release stated.
Wolf was the broker-in-charge of his own firm, said Janet Thoren, an attorney for the North Carolina Real Estate Commission, in an email.
According to the DOJ, Wolf arranged for luxury real estate builders to sell the properties at inflated prices in order to obtain inflated mortgage loans. Wolf arranged for the difference between the inflated prices and the real prices to be paid from the loan proceeds as kickbacks. Those kickbacks were funneled through phony companies to look like they were payments for work on teh properties; work that was never done. The kickbacks typically ranged from $50,000 to $600,000, and Wolf was involved in transactions that caused $7 million in losses, the DOJ said.
Wolf was involved in the purchase of a house in Waxhaw in April 2007 for an inflated price of $2.1 million, for which more than $1.8 million in loans were fraudulently obtained, the indictment stated. The property was foreclosed on when the loan payments lapsed and it was later resold for $660,000 — $1.44 million less than the inflated purchase price.
According to the indictment, Wolf also fraudulently obtained $1.35 million in loans for a house in Waxhaw with an inflated price of $1.35 million in March 2006. The property was foreclosed on when the loan lapsed. It was later sold for $400,000 — $950,000 less than the inflated price.
Wolf was involved in a similar scheme in Charlotte in August 2007, in which he conspired to fraudulently obtain $729,000 in loans for a house that was later foreclosed on. The property later resold for $375,000 — $750,000 less than the inflated purchase price of $810,000, the indictment stated.
The N.C. Real Estate Commission will schedule a disciplinary hearing for Wolf now that he has been sentenced, Thoren said. The hearing could be in November.
Perry was convicted for his involvement in arranging a fraudulent transaction that caused a loss of $500,000, the release stated. More than $200,000 was funneled through his bank account. He and his co-conspirators claimed in documents that money was spent on brick work. The work, however, was never done, and instead the money was pocketed by participants.
Perry was involved in fraudulently obtaining more than $1.12 million in loans on a house in Waxhaw that had an inflated purchase price of $1.25 million in April 2007, the indictment stated. He got $96,000 in kickbacks in that scheme, and the loan payments were allowed to lapse. The house later was resold for only $626,500.
Wood also promoted mortgage fraud, the release stated. He arranged for two fraudulent mortgage transactions that resulted in more than $1.5 million in losses. He and the other participants in the scheme lied about spending money for home improvements, which were never done, and instead took that money as kickbacks.
Wood helped to fraudulently obtain more than $1.39 million in loans on a house with an inflated purchase price of $1.4 million in Charlotte in August 2006, an indictment stated. The house was foreclosed on when the loan payments lapsed, and later resold for $550,000.
U.S. District Judge Graham C. Mullen noted during sentencing that the losses from the fraudulent activities went beyond the lending institutions because it resulted in lower property values in area neighborhoods.
Operation Wax House has led to the conviction of 89 of the 91 defendants charged in the scheme. The remaining defendants, Nazeere Saddig and Ramin Amini, are international fugitives.
The investigation was conducted by the North Carolina Secretary of State’s Securities Division, the FBI’s Charlotte Division, and the IRS’ Criminal Investigation Division.