A former Marin County, California, mortgage broker was sentenced to three years in prison in a real estate fraud case, federal prosecutors said.
Paul Sloane Davis, 76, of Santa Rosa, California, was one of two defendants convicted in the case.
The other, 58-year-old Diane Cobb, who has since moved to Ohio, pleaded guilty last year.
Davis and Cobb made more than $1 million in profit from the scheme, according to the U.S. Attorney’s Office in San Francisco.
The case involved a company Cobb and Davis ran called DM Financial, through which they lined up investors to fund short-term “bridge loans” for home buyers.
The defendants provided the investors with the names of the borrowers, as well as promissory notes and deeds that purported to secure the loans, authorities said.
Authorities said the supposed borrowers received no money and were unaware their identities had been used to solicit loans.
Davis and Cobb allegedly diverted the $2.4 million for personal use or to pay off earlier investors.
The scheme was carried out from 2009 through December 2012.
The defendants were indicted by a federal jury on Oct. 31, 2013, and arrested in Las Vegas.
Cobb admitted to 14 counts related to mail fraud and wire fraud in July 2014. She is scheduled to be sentenced Jan. 16 before Judge Charles Breyer in federal court in San Francisco.
Davis pleaded guilty last March to 14 counts including mail fraud, wire fraud and conspiracy. He was sentenced by Breyer on Tuesday and ordered to pay $1.7 million in restitution, according to the U.S. Attorney’s Office.
