MYRTLE BEACH — Area real estate sales agent Kevin Mayberry pleaded guilty last week in federal court to a mortgage fraud charge, joining nearly two dozen area buyers, sellers, brokers and others who either have admitted their roles or been found guilty in widespread fraud schemes that helped to hasten the Grand Strand’s real estate crash.
More than two years after U.S. Attorney William Nettles vowed to make mortgage fraud investigations a top priority in South Carolina – with a focus on the Myrtle Beach area – the convictions are in addition to at least a dozen more indictments working their way through the system. Criminal defense lawyers and prosecutors working those cases say many more indictments are imminent as those who plead guilty cooperate with officials in the hopes of reducing their sentences.
Mayberry admitted that he failed to disclose on closing documents a $100,000 payment he received from the sale of a home on March 11, 2008. Mayberry is charged with conspiracy to defraud the United States, which carries a maximum penalty of up to five years in prison and a $50,000 fine followed by up to three years of supervised release.
A sentencing hearing has not been scheduled for Mayberry.
Mayberry’s guilty plea follows guilty pleas in an unrelated case by Linda and Anthony Audino, who admit they received monetary kickbacks from the purchase of townhomes in the Pineapple Bay project at 7001 Porcher Drive in Myrtle Beach. The Audinos are charged with defrauding the U.S. Department of Housing and Urban Development by failing to disclose the kickbacks on real estate closing documents. The charge carries a maximum sentence of one year in prison and a $100,000 fine.
The Audinos are scheduled to be sentenced Sept. 14 in federal court in Florence.
Ford Shelley, the developer of Pineapple Bay, previously pleaded guilty to one felony charge of mail fraud and is facing a maximum sentence of 20 years in prison and a $250,000 fine.
No sentencing date has been set for Shelley, but on Friday he filed an objection to a pre-sentence report prepared by the U.S. Probation and Pretrial Services office that will be used to determine how much time, if any, he spends in prison.
Shelley said in the objection that GMAC bank -- which claims to have lost $873,536 on mortgage loans at Pineapple Bay -- actually didn’t lose any money because the bank immediately packaged the mortgages into securities and sold them at a profit to investors. When the loans went bad, Shelley said, GMAC then foreclosed on the properties and re-sold them, keeping that money as well.
Shelley also said that GMAC “knowingly abandoned all underwriting standards and made bad loans without verifying income or assets and with knowledge the borrowers could not repay the loans.”
“GMAC knew the buyers falsified their loan applications,” Shelley said in court documents.
GMAC has not filed a response to Shelley’s claims.
Shelley sold most of the townhomes to family members, friends and business associates, according to court documents.
For example, Gaither B. Thompson, Shelley’s brother-in-law, purchased one of the units for $625,000 in November 2006. Thompson pleaded guilty to HUD fraud in January and was sentenced in May to five years of probation. Linda Audino – a business associate of Shelley and a real estate agent at the time – and her husband, Anthony, purchased two townhomes in November 2006 for $625,000 apiece.
Michael Sichitano, another business associate of Shelley, bought one townhome for $625,000 in November 2006. Sichitano pleaded guilty to HUD fraud in July and was sentenced to three years of probation.
Drug charges filed against man whose debris fire sparked wildfire
Marc Torchi, the Conway man whose backyard debris burn in April 2009 sparked a wildfire that charred 31 square miles along S.C. 31 and destroyed dozens of homes in the Barefoot Resort neighborhood in North Myrtle Beach, is facing multiple drug charges following his arrest last week by Horry County’s Drug Enforcement Unit.
The 42-year-old Torchi had been the target of an ongoing surveillance operation by DEU agents, who eventually gathered enough evidence to obtain a search warrant for his home, according to a news release from Dean Bishop, the DEU’s deputy director. Agents found 28 grams of marijuana, 290 packets of “bath salts” – a designer drug containing psychoactive stimulants – and other narcotics when they searched the home, according to the news release.
Torchi was arrested Monday and charged with five counts of possession and manufacturing of controlled substances. He was released on Tuesday after posting $26,650 in bond, according to the J. Reuben Long Detention Center web site. No court date has been scheduled.
Torchi became the focus of a state Forestry Commission investigation into the 2009 wildfire after the agency traced its origin to an illegal backyard debris burn at his home. That fire at Torchi’s home spread onto adjoining property, eventually erupting into one of the costliest wildfires to hit the Grand Strand, causing more than $16 million in property damages. Although the fire hit Barefoot Resort in the early morning hours, no lives were lost
Torchi – whose family reported receiving death threats over the fire – pleaded guilty in October 2009 to a pair of misdemeanors related to the backyard burn and paid $732 in fines. He was not held criminally liable for the wildfire.
Judge tosses most of former NMB officer’s suit
U.S. Judge Bryan Harwell has adopted the recommendations of a federal magistrate judge and ruled against former North Myrtle Beach police Lt. Randy Fisher on most of the claims in a wrongful termination lawsuit Fisher filed against city officials and William Bailey, the city’s former public safety director.
Fisher alleged that he was forced to resign on Nov. 12, 2009, because he had been critical of his bosses and was wrongfully accused of providing confidential information to a city resident about the wildfire that destroyed homes in the Barefoot Resort community.
Magistrate Judge Thomas Rogers said in July that Fisher would have had to show the city violated public policy, either by forcing Fisher to do something illegal or violating criminal law by terminating him, in order to go forward with a civil rights claim. Rogers said Fisher provided no specific examples of legal wrongdoing by the city and added that the city is protected by South Carolina’s “at-will” work laws, which allow employers to discharge workers for almost any reason.
Rogers recommended awarding the city – along with former City Manager John Smithson and Assistant City Manager Steve Thomas – a judgment on the pleadings and Harwell adopted that recommendation last month.
Harwell also adopted Thomas’ recommendation that claims against Bailey be dismissed.
Fisher, in his lawsuit, said he was forced to resign because Bailey accused him of leaking confidential information about the wildfire. Fisher said Bailey’s actions were a violation of his First Amendment rights. Later in his complaint, however, Fisher denied ever having given confidential information to anyone about the wildfire. Rogers said there could not have been a First Amendment violation for something Fisher claims he never said.
However, Harwell’s ruling does not put an end to the entire lawsuit. Harwell said a third claim citing retaliation can go forward. In that claim, Fisher says city officials retaliated against him because he complained about discriminatory treatment of women in the public safety department.
Fisher’s resignation followed a 12-year career with the city’s public safety department.
Contact DAVID WREN at 626-0281.