Industry News

Home builder sentenced in $3.7 million real estate fraud

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A federal judge sentenced a North Carolina home builder to 27 months in prison last week, saying the man's role in a $3.7 million mortgage fraud scheme had had "dramatic and far-reaching consequences," the Charlotte, N.C. Observer reported. Greg Smith, a Lake Norman, N.C., home builder, had pleaded guilty to three counts of mortgage fraud in September 2004, media reports said. Smith built homes for several subdivisions in Cornelius, N.C., and residents of those subdivisions told the Observer in fall 2003 that suspicious sales, too many absentee owners and a rash of foreclosures had dramatically reduced property values. U.S. District Judge Graham Mullen said jail was "necessary to reflect the seriousness of the offense," according to the Observer. A federal investigation showed that Smith, along with more than a dozen real estate professionals, conspired to inflate the selling prices of homes, media reports said. The government said Smith participated in 78 deals that cost lenders $3....