MYRTLE BEACH — Local couple Anthony and Linda Audino were sentenced last week in federal court for their roles in a mortgage fraud case involving townhome sales at the Pineapple Bay project along Porcher Drive here.

The Audinos, of Myrtle Beach, were placed on four years of probation – including home confinement for the first six months – and the couple must pay a combined $763,156 to banks that lost money on the home sales. The restitution must be paid at the rate of at least $250 per month and a judge will consider early termination of the couple’s probation after $10,000 has been paid, according to court documents filed in the case.

The Audinos had faced a maximum sentence of one year in prison and a $100,000 fine.

The Audinos admit they received monetary kickbacks from the purchase of two townhomes at Pineapple Bay. The couple was charged with defrauding the U.S. Department of Housing and Urban Development by failing to disclose the kickbacks on real estate closing documents.

Ford Shelley, the developer of Pineapple Bay, has 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. His sentencing is scheduled for Oct. 10 in federal court in Florence.

Shelley sold most of the townhomes to family members, friends and business associates, according to court documents.

Shelley, in an objection to his presentencing report filed last month, said 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 GMAC knew there was falsified information on the loan applications, adding the bank “knowingly abandoned all underwriting standards and made bad loans without verifying income or assets and with knowledge the borrowers could not repay the loans.”

Contact DAVID WREN at 626-0281.