Charges have been handed down by a federal grand jury against an Orange County, Calif., man who allegedly duped his warehouse lender.
Irvine, Calif.-based Trust One Mortgage Corp. had been actively licensed in several states, some as recently as 2011.
Among the states it held licenses in were Alaska, Arkansas and Nevada. It had also maintained licenses in the states of Oklahoma, Virginia and Wyoming.
National City Bank, which now operates as part of PNC Bank, provided a warehouse line of credit to Trust One Mortgage LLC.
Trust One was supposed to pay off specific loans on the warehouse line within a set period of time or when the warehouse lender demanded payment.
But, according to the U.S. Attorney’s Office for the Western District of Kentucky, the company presented fake funding requests for nonexistent mortgages to National City.
In all, 53 fraudulent funding requests were submitted between March 2007 and October 2008, according to the Department of Justice, generating $17.9 million in proceeds for Trust One.
PNC ultimately lost $12 million as a result of the fraud.
Trust One Mortgage was owned an operated by former president and chairman Brady D. Bunte.
On Tuesday, the Justice Department announced that charges against Bunte were issued in a single-count, sealed indictment on Sept. 18.
He was arraigned in U.S. District Court for the Central District of California in Santa Ana on Monday and released on a $100,000 bond.
Bunte, 49, faces up to three decades in prison.
The case is being pursued federal prosecutors in Kentucky because National City Bank ran its warehouse lending operations in Louisville, Ky.
