A former Nashville car lot owner was sentenced to nine years in prison for his role in a mortgage fraud scheme resulting in the theft of $240,000 from First Tennessee Bank, prosecutors told NashvilleCityPaper.com last week.

David B. Todd III, who owned the former Park Place Motor Cars lot, was sentenced Tuesday after having been convicted by a jury Nov. 1 of theft and conspiracy to commit theft, reports said.

The investigation, which stretched 20 months, was difficult to unravel and prosecute, Jim Milam, assistant district attorney general at the Davidson County District Attorney’s Office, told NashvilleCityPaper.

“This scheme had a lot of different moving parts, and they all had to be synchronized in order to make the thing happen,” Milam said, according to reports.

Milam said Todd and David John, a mortgage broker, were able to pocket more than $170,000 by getting the bank to loan money on a house that was overvalued by about $500,000, according to reports.

John also received a nine-year prison sentence on Dec. 2, but the sentence has been stayed pending appeal, media reports said.

The defendants allegedly convinced another defendant, Younus Razzaq, to purchase Todd’s mother’s home at 2390 Bellevue Manor Drive for $1.2 million, when its real market value was only between $700,000 and $800,000, Milam told NashvilleCityPaper.

Using Razzaq’s name and credit on a loan application, with “grossly inaccurate” real estate appraisals, Todd and John received a home equity loan for $960,000 – 80 percent financing – secured by a second mortgage on the property, reports said.

Razzaq, who never intended to live on the property, was to put 20 percent down, or about $240,000 but never did, because a closing agent cooperated and wrote a check from an escrow account, Milam told NashvilleCityPaper.

So the bank ended up loaning 100 percent of the purchase, believing the property was secured, when it wasn’t, reports said.

When the perpetrators didn’t pay on the loan, the holder of the first mortgage, First Horizon Home Loans Corp., foreclosed on the property, which is currently listed for sale for $725,000, according to reports.

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Send tips or a Letter to the Editor to janis@inman.com or call (510) 658-9252, ext. 140.

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