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Mortgage Lawsuits News | Mortgage Litigation Index
Mortgage industry lawsuit news and mortgage litigation coverage. Stories about legal settlements, judgments and mortgage class actions.


Criminal Cases Against Broker, Secondary & Accounting Employees

Recent criminal actions by mortgage-related employees

March 29, 2010

By SAM GARCIA


Recent activity in mortgage-related crime cases includes a mortgage broker who pled guilty to diverting $0.6 million intended to fund mortgages for his own benefit. In another case, a former secondary marketing manager is accused of overstating loan amounts so she could collect more than $0.3 million, while a former accounting employee stole more than $4.4 million by using her position at a bank to create fraudulent mortgages and delete accrued interest.

Former mortgage broker Eric S. Murphy Jr., who was originally indicted in 2007, pled guilty to two counts of Class B felony theft by deception in connection with a residential investment scam, the Maine Office of Securities and Attorney General's Office announced on March 10. Murphy allegedly deceived investors about $570,000 he took between July 2006 and April 2008.

"Instead of using funds received from investors to fund specific mortgage loans, as he had represented he would, he used the bulk of the proceeds to meet his own business and personal obligations," the state said.

Murphy, who lost his mortgage broker license in April 2008, faces a likely prison sentence of four years this week. But the plea bargain calls for all but 18 months of the sentence to be suspended. He will have the option of going to trial if the judge imposes a more severe sentence than recommended in the plea agreement.

The court is attempting to determine restitution in the criminal case against Vicky L. Young, according to case documents. Young was indicted in February 2009 over allegations she stole $281,165 from her employer, Hometown Bank of Corbin Inc. She pled guilty the next month and awaits sentencing.

Young reportedly committed the alleged crimes between 2005 and 2007 while she was a secondary market mortgage officer at the Corbin, Ky., bank. She allegedly overstated loan amounts.

Roberta Stutzman was charged in U.S. District Court for the Eastern District of Pennsylvania on Feb. 22 with misappropriating $4,414,538 of her employer's money, a news release from the U.S. Department of Justice said. Stutzman allegedly stole the money from her employer at the time, National Penn Bank, where she was an accounting executive who was responsible for retail loan records.

According to the government, Stutzman created two fake lines-of-credit under fake names and two lines-of-credit under her husbands name. She regularly accessed the computer database to delete accrued interest on the fake loans.

Stutzman spent the loot on real estate, expensive jewelry and high-priced vehicles -- including three BMWs, a Hummer and snowmobiles -- according to court documents. She also used the cash for vacations, gifts and money-transfers to third parties. The 63-year-old defendant faces up to 63 years in prison and a $2.1 million fine.


State of Maine v. Eric S. Murphy Jr.
Dec. 20, 2007 (Superior Court, State of Maine, Hancock).

United States of America, Plaintiff, v. Vicky L. Young, Defendant.
Case 6:09-cr-00015-ART-REW, Feb. 26, 2009 (U.S. District Court for the Eastern District of Kentucky).

United States of America v. Roberta L. Stutzman.
Feb. 22, 2010 (U.S. District Court for the Eastern District of Pennsylvania).


Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of MortgageDaily.com in 2000.

e-mail:
[email protected]


Mortgage Broker News | Originator Newsletter
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Mortgage Fraud News | Fraud Statistics | Fraud Index | Fraud Blog
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