More Sevier County Scum!
Posted in the Sevier County Forum
#1 May 3, 2012
They were "the mortgage fraud dream team" who seized upon a program that would later be blamed, in part, for the financial devastation of both the banking and housing industries and the so-called "great recession" of 2008, a federal prosecutor told jurors Wednesday.
Sevierville lawyer Jerry D. Kerley and Pigeon Forge developer Jeffrey Whaley are standing trial this week in U.S. District Court in an alleged mortgage scheme involving more than $6 million in fraudulent loans.
Two others involved in the alleged conspiracy — developer Kenneth Lee and mortgage broker Mary Bivens — have already pleaded guilty and are expected to testify against Kerley and Whaley in what could be a two-week trial. A fifth person who was named in court Wednesday as also profiting from the alleged scheme — Whaley's sister and partner, Pigeon Forge Realtor Joyce Whaley — has not been charged.
Assistant U.S. Attorney Trey Hamilton told jurors Wednesday in opening statements the alleged scheme left SunTrust Mortgage Inc. with a bevy of foreclosed cabin properties and a loss of $1.7 million and Citizens Bank in New Tazewell with a potential loss of $500,000.
Hamilton outlined his case Wednesday afternoon. Jurors won't hear from Kerley's defenders, attorneys Tom Dillard and Wade Davies, or Whaley's lawyer, Tracy Jackson Smith, until today.
The alleged scheme began, Hamilton said, when Whaley and his sister via their GBO Enterprises firm in 2005 developed Black Bear Ridge cabins in Pigeon Forge, a venture that did not prove immediately successful.
"Jeff Whaley was in a pinch," Hamilton said. "He had, among other things, a mountaintop of cabins to sell … and he's experiencing his own cash flow problems."
Meanwhile, Lee, a scandal-mired developer in his own right, owed Whaley $1 million in loans, and "his source of money for paying (Whaley) had dried up," Hamilton said.
But Lee had "a stable of employees, family and friends" with high credit scores, and Whaley had a friendly mortgage broker in Bivens and title attorney in Kerley, who operated the Guaranty Land Title company in Sevierville, Hamilton said. Meanwhile, Whaley's sister was an agent with Pigeon Forge Realty.
It was not clear from Hamilton's opening statements whether Joyce Whaley knew that her brother allegedly cooked up a scheme to use "straw borrowers" provided by Lee, false loan documents filled out by Bivens and financial trickery served up by Kerley to convince the two banks to make loans for the cabins that no one intended to pay back. Joyce Whaley did earn hefty commissions from the loans, though, Hamilton said.
Although the tactics varied, Hamilton said the scheme involved using a banking industry program called "reduced documentation loans," in which a high credit score and hefty down payment by the borrower meant little oversight over the accuracy of the information supplied to the banks. That program has been faulted, in part, for causing the housing bubble to burst and the banking industry to face near financial ruin.
Kerley, Hamilton said, would use the banks' own money to supply the straw borrowers with down payments while assuring the banks the cash actually came from the straw buyers. Everyone made money. The straw borrowers earned a percentage. Kerley earned title work fees. Bivens earned brokerage fees, and Whaley skimmed off the "equity milk" — the difference between the loan amount and whatever expense he had actually incurred in constructing the cabins, Hamilton said.
The trial, presided over by U.S. District Judge Thomas Phillips, continues today.
#2 May 3, 2012
This story will NEVER make the Mt. Mess Comic Book!
#5 May 5, 2012
Brad Lee Albright, 43, of 334 Meriweather Way in Pigeon Forge, was charged May 2 with violation of pre-trial bond conditions. He was being held.
David Allen Artrip, 47, of Kingsport, was charged may 3 with a fourth count of DUI and violation of implied consent law. He was being held.
Ryan Samuel Avins, 23, of 3008 Kathy Drive in Kodak, was charged May 3 with aggravated robbery and aggravated burglary. He was being held in lieu of $55,000 bond.
Lloyd Richard Conley, 31, of 1989 McCleary Road in Gatlinburg, was charged May 3 with domestic assault. He was released on $2,000 bond.
Ashley Renee Fritz, 23, of Duffield, Va., was charged May 2 with theft over $1,000 and possession of drug paraphernalia. Shew as being held in lieu of $9,500 bond.
Patricia Jean Jones, 42, of Knoxville, was charged May 3 with domestic assault and prostitution. She was being held.
Phillip Troy Jordan, 43, of 650 White School Road in Seymour, was charged may 2 with domestic assault. He was reased on $2,500 bond.
Michael Anthony O’Conner, 35, of 274 River Valley Court in Sevierville, was charged May 2 with violation of pre-trial supervision. He was being held.
Stacy Carol Ricketts, 26, of Pennington Gap, Va., was charged May 2 with theft over $1,000. She was being held in lieu of $10,500 bond.
Angela Dawn Seals, 33, of Pennington Gap, Va., was charged May 2 with theft over $1,000 and possession of drug paraphernalia. She was being held in lieu of $12,500 bond.
Stephen Bradley Slayton, 30, of Pennington Gap, Va., was charged May 2 with theft over $1,000. He was being held in lieu of $12,500 bond.
William Lewis Slayton, 26, of Jonesville, Va., was charged may 2 with two counts of theft. He was being held in lieu of $11,000 bond.
Matthew David Stallings, 24, of 638 Wears Valley Road in Pigeon Forge, was charged May 2 with filing a false report. He was released on $750 bond.
Jeffrey Michael Strickland, 24, of 2012 Valley Way in Sevierville, was charged May 2 with accessory after the fact. He was being held.
David A. Trent, 31, of Knoxville, was charged May 2 with possession of drug paraphernalia. He was released on $1,000 bond.
Quinteshes Juane Woods, 20, of Bristol, Va., was charged May 2 with simple possession of marijuana. He was released on $2,500 bond.
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