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by CareyBot

A second defendant in a federal mortgage fraud case in Mississippi pleaded guilty Thursday to one of 12 charges against him, media reports said.

Malcolm C. Clark of Hattiesburg, Miss., pleaded guilty to conspiracy to commit fraud, admitting he recruited at least one buyer for a so-called “flipping” scheme, according to reports.

Clark, 36, is to be sentenced Aug. 24 and could face up to five years in prison and a fine of up to $250,000, the Hattiesburg American reported.

Prosecutors contend that the alleged ringleader, Richard Lucas, and nine others bought property at low prices and resold it, sometimes to each other, based on inflated appraisal prices, reports said. They then allegedly split the proceeds from mortgage loans obtained with falsified documents, letting the loans fall into foreclosure, according to reports.

According to John Meynardie, assistant U.S. attorney, Clark worked for Lucas, recruiting so-called investors to buy property, fielding calls from mortgage lenders, picking up allegedly fake financial documents prepared by Michael T. Cox of Oak Grove and buying real estate for Lucas, reports said.

The indictment lists Clark as an employee of Lucas Developments and its affiliates, and accuses him and others of telling investors they would be paid for allowing their names to be used as buyers and would have no out-of-pocket expenses, reports said.

Marcy Irby, one of Clark’s co-defendants, pleaded guilty April 5 to conspiracy to commit fraud, reports said. She also is to be sentenced on Aug. 24, according Lucas is undergoing court-ordered drug rehabilitation treatment at a facility in Jackson. The other defendants in the case are free on their own recognizance.