A St. Louis mortgage agent and two mortgage brokers from California pleaded guilty to bribery charges relating to a bank scheme they participated in, federal officials said.

Derek Fenton, 30, of Wentzville, Mo.; Richard Mehlinger, 44, of Los Angeles; and Terry Gale, 42, of Los Angeles, each pleaded guilty to one felony count of bribery in connection with bank transactions, according to a U.S. Attorney’s office statement.

Each defendant now faces up to 30 years in prison, up to $1 million in fines, and mandatory restitution, officials said.

According to the facts filed with the court, between November 2002 and June 2004, Fenton was employed by CitiMortgage in O’Fallon, Mo., and was the primary contact at the company for several mortgage brokers located throughout the United States. In a typical scheme, Fenton would allow these brokers to backdate their loan commitments so that the brokers’ clients would receive more favorable terms from CitiMortgage.

In exchange for the more favorable terms, Fenton accepted bribe payments from several of these mortgage brokers, according to court documents.

Richard Mehlinger and Terry Gale were employed by Delta Home Loans, doing business as Windsor Funding Group, located in Los Angeles. Fenton caused CitiMortgage to make 41 loans for approximately $20 million on terms more favorable than permitted by the lender. In exchange, between Nov. 1, 2002, and Dec. 31, 2003, Mehlinger and Gale paid Fenton about $47,651 in approximately 20 separate payments.

CitiMortgage lost a net total of approximately $403,043 on the loans, according to court filings.

Apart from Mehlinger and Gale, Fenton accepted smaller cash payments and other gifts as bribes from other mortgage brokers, officials said. The total bribe payments received by Fenton was more than $70,000.

All three defendants appeared before U.S. District Judge Henry E. Autrey in late July.

Sentencing for Fenton is scheduled for Oct. 27, 2005. Sentencing for Mehlinger and Gale is slated for Nov. 3, 2005.


Send tips or a Letter to the Editor to jessica@inman.com or call (510) 658-9252, ext. 133.

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