Six year mortgage fraud investigation concludes - Beckley, Bluefield & Lewisburg News, Weather, Sports

Six year mortgage fraud investigation concludes

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A six-year federal mortgage fraud investigation is over with the Nov. 5 sentencing of a Utah man accused in connection with a West Virginia property scam that cost lenders nearly $2 million.

Raymond P. Morris, 51, of South Weber, Utah, appeared in federal court, where he was sentenced to nearly five years in prison for his leadership role in the scheme.

"I am here today to take full responsibility for my actions," Morris told the court. "I know my actions have harmed a community, and I have accepted that."

A September 2011 indictment was filed against Morris along with 38-year-old Hurricane resident Deborah L. Joyce and 37-year-old Utah resident Michael Hurd.

According to the indictment, Morris was associated with the Utah-based real estate investment club 100X Inc., and he also was the sole principal in Nevada-based Integrity Financial Solutions Inc.

According to a news release from the U.S. Attorney's office, Joyce was a Putnam County real estate developer who wanted to build single-family homes in the Stonegate subdivision.

Joyce obtained falsely inflated appraisals from two appraisers, James Thornton, 48, and Mark Greenlee, 50, according to the news release.

"Joyce sent those appraisals to Morris who in turn pitched the purchase of these same properties to the 100X members as a real estate investment opportunity."

Prosecutors accuse defendants of misrepresenting facts concerning the true sales price, the home's fair market value, the down payment's source, cash paid to the out-of-state borrowers and commission paid to Morris.

The indictment states Morris arranged for members to use The Gift program, which was a "seller-funded down payment assistance program" operated by Hurd, to close and purchase properties at the inflated price.

The news release states lenders funded their own down payment and made initial mortgage payments through this program.

"His fall was farther than his ascent. A few people were surprised that he did not have a single hour in training in real estate or financial service," said Morris' attorney John Carr. "He would have been well-served if he had done so."

U.S. District Judge Thomas Johnston agreed saying Morris had a "talent for leadership."

"It's a shame you had to employ those talents in the way you did," he said. "If you didn't, you could have been successful."

Assistant U.S. Attorney Thomas Ryan said the people who suffered the most from the scheme are people the court can't compensate.

"We have individuals in Stonegate looking to refinance their homes but they can't because of the stigma of the subdivision. The only thing we can do is give an appropriate sentence," Ryan told the court.

U.S. Attorney Booth Goodwin said Morris and Hurd ran a similar scheme in Utah. Morris' sentencing is set for Nov. 13 and he could face no less than 51 months to run concurrently with his West Virginia sentence.

"He upset an entire community balance in Stonegate. … It's difficult to get appraisals from Stonegate because of that stigma," Goodwin said in a news conference following the sentencing.

Johnston deferred judgment on restitution until parties determine the exact amount of one of the properties.

However, Morris could end up paying from $3.5 million to $4 million in restitution. The final determination of the property value also will affect the restitution of Deborah Joyce, Hurd and Thornton.