A former mayoral candidate will spend the next two years in federal prison for a million-dollar mortgage fraud scheme that involved kickback, arson, luxury vehicles and a private airplane, prosecutors said.
On Friday, a federal judge in Atlanta sentenced Mr. H. Gregory Cordell, a real estate broker and developer who had run for mayor of Cartersville, to two years and three months in a federal prison to be followed by five years of supervised release, according to the U.S. Attorney's Office.
Mr. Cordell, who pleaded guilty in November to bank fraud, also was ordered to pay more than $1 million in restitution, federal prosecutors said.
“Mortgage fraud involving fraudulently inflated sales prices contributed to the housing bubble that, when it burst, caused so much damage to the economy in Georgia and across our nation,” U.S. Attorney Mrs. Sally Quillian Yates said in a news release.
“This defendant not only lied on mortgage applications to get over $1 million in loans, he fraudulently inflated the purchase price to get a bigger mortgage and then was paid a kickback under the table from the proceeds.”
The money Mr. Cordell obtained through the mortgage fraud went into financing his lavish lifestyle, according to the FBI.
“The defendant, through his fraudulent actions and, later, his extravagant purchases of airplanes and luxury vehicles, exhibited a selfish greed that he will now have to answer for,” the FBI’s Special Agent in Charge, Mr. Brian D. Lamkin, said.
Federal prosecutors describe Mr. Cordell's scheme and its consequences:
In March 2003, Mr. Cordell bought a house and six acres of land at 179 Old Mill Road in Cartersville for $1.25 million. Although the seller had listed the property for approximately $950,000, Mr. Cordell and the seller agreed to inflate the sales price by $307,000, obtain an inflated mortgage from Washington Mutual, and then pay the extra $307,000 to Mr. Cordell after closing. This kickback arrangement was not disclosed to the bank.
In his loan application, Mr. Cordell also understated his financial liabilities and overstated his annual income by claiming he owned several properties that he no longer owned.
In August 2004, Mr. Cordell refinanced the property, obtained a mortgage from Washington Mutual for $1 million and drew out $62,500 in equity. His mortgage application contained the same false claims about income and assets as his original application.
On the evening of Sept. 1, 2004, an arsonist destroyed the home while Mr. Cordell and his family were driving to Florida for a vacation. Because of the timing of the fire, he never made a payment on the new mortgage.
Mr. Cordell’s property insurer paid off the mortgage to avoid the accrual of interest while it investigated the arson.
With the mortgage lien lifted, Mr. Cordell sold the property in October 2005 for $900,000 and spent the proceeds without paying any to the insurer.
With the kickback, refinance, and sale amounts, Mr. Cordell pocketed about $1.26 million from the Old Mill property.
Mr. Cordell purchases during this time period included a private airplane, a Porsche, two Suburbans, two Mercedes Benz SUVs, and other vehicles, federal investigators said.
In an earlier civil case tried in federal court in Rome, the property insurer obtained a judgment against Mr. Cordell for over $1 million for the amount it paid to Washington Mutual to satisfy the mortgage.
In August 2008, Mr. Cordell was indicted on state arson, insurance fraud, and loan fraud charges. That case remains pending in Bartow County Superior Court.
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