Mortgage fraud earned $22 million – and prison term
Mortgage fraud sentence of 28 years upheld by federal appeals court. Atlanta developer's scheme left lenders and guarantors with $38 million in losses.
ATLANTA – The federal appeals court in Atlanta on Tuesday upheld the 28-year prison sentence for a prominent Atlanta real estate developer convicted of masterminding a complex mortgage fraud scheme that earned him and his associates about $22 million.
It also ordered a federal judge to hold a new hearing for Les Rector, who prosecutors say was Hill's right hand man, over a dispute about an agreement with authorities that would have protected him from some charges.
Hill became the face of mortgage fraud in Atlanta after he was convicted in March 2007 of what prosecutors said was a widespread plot to fraudulently obtain more than 300 mortgage-backed loans for buyers who used the money to purchase overpriced real estate in Atlanta.
Almost all of the $110 million in loans went into default, leaving lenders and guarantors stuck with $38 million in losses, according to court records. People used as straw buyers were left with ruined credit, and innocent residents in hard-hit neighborhoods saw their home values plummet, Circuit Judge Ed Carnes wrote in Tuesday's ruling.
All told, Carnes said in the ruling, Hill and his team earned almost $22 million in "illicit gain" between 2000 and 2003.
Hill appealed the decision, claiming that the government didn't present enough evidence to sustain the convictions, and that the prison sentence was unnecessarily harsh in part because it was longer than any of the sentences the others involved in the scheme face.
But the three-judge panel soundly rejected his arguments in a scathing 163-page opinion that traced the plot from its inception to its downfall. The decision painstakingly recounted and then dismissed almost every objection filed by Hill and the others during the 31-day trial, which involved more than 100 witnesses and thousands of pages of documents.
"Without Hill there would have been no conspiracy, no massive amount of mortgage fraud resulting from it, and no ruined lives in the wake of it," read the opinion. "He bore the greatest responsibility for the massive crime and deserved the longest sentence."
The exception was an appeal by Rector, who questioned a judge's decision to dismiss his claim that the government breached an agreement that would have protected him from some of the charges in exchange for cooperation. The panel vacated the order and sent the issue to a lower judge for review.