Three people convicted by a jury in a Mississippi mortgage fraud case Wednesday, including an appraiser, face the possibility of long prison sentences when they are sentenced in February.

Richard Lucas, the alleged ringleader of the scheme, and Kimberly Castle were each found guilty of one count of conspiracy to commit bank and wire fraud, one count of bank fraud, nine counts of wire fraud and money laundering.

Lucas was accused of controlling a scheme in which defendants bought distressed property in Hattiesburg, Laurel, Petal and Gulfport, obtained inflated appraisals, and flipped the properties for a profit.

Appraiser Kenneth Stalnaker was found guilty on nine counts in connection with the mortgage flipping scheme; at least seven other people facing federal charges in the scheme have entered guilty pleas, including some of those who testified against Lucas, Castle and Stalnaker.

Appraiser Jacqueline Mosley, who pleaded guilty in March to a single count of bank and wire fraud, said Lucas would tell her the value he wanted on several appraisals she performed for him, the Hattiesburg American reported.

A third appraiser involved in the scheme, Loretta Joy Champ, pleaded guilty in October to preparing false appraisals for associates and clients Lucas Champ and Mosley were partners in J&J Appraisal Services.

Prosecutors presented as evidence documents including falsified bank and income statements, W-2 forms and Social Security documents, the newspaper said.

Other witnesses included investors and straw buyers, many of whom said they signed documents prepared for them without reading them, receiving as much as $16,000 for filling out applications.

Lucas, Castle and Stalnaker face up to 30 years in prison and a $1 million fine on the bank fraud charge, five years in prison on each wire fraud charge, and up to five years in prison and a $250,000 fine on the conspiracy charge.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Limited time: Get 30 days of Inman Select for $5.SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription