Condominium developer Ford Shelley will have to report to federal prison on Wednesday after a judge on Friday denied Shelley’s request to postpone his sentence while he appeals his case.
Judge Terry Wooten, in a written order, stated that “after careful consideration, the motion to stay [Shelley’s] reporting date … is denied.”
Shelley was sentenced to 20 months in prison after pleading guilty last year to one felony charge of mail fraud related to sales at his Pineapple Bay condo project on Porcher Drive. Shelley is to report to the Bennettsville Federal Correctional Institution, a medium security facility for male inmates.
Shelley had asked Wooten to delay his sentence because he claimed his lawyers misled him into pleading guilty to a crime he now says he did not commit. Shelley said in court documents that he pleaded guilty because his lawyers told him he would not serve any time in prison.
Shelley also claims prosecutors intimidated him into pleading guilty by threatening to file charges against his wife, Gina, and “throw the book at him” if he didn’t sign a plea agreement, according to court documents.
Shelley’s appeal will continue while he is serving his sentence.
Shelley waived his right to appeal his sentence when he signed a guilty plea in October 2011. The only way he can avoid that waiver is by proving he had ineffective counsel or that there was prosecutorial misconduct in his case. Shelley’s appeal focuses on what he calls bad advice he received from his lawyers and their assurances that he would not get prison time prior to pleading guilty.
“Shelley would not have pled guilty to the crime charged, but for trial counsel’s assurance of a no-jail-time sentence,” Shelley’s court filing states, adding that his lawyer urged him “to accept the agreement because if he didn’t ‘they [prosecutors] will dig something up’.”
When Shelley’s pre-sentencing report was completed in February, it showed the bank that provided mortgages at Pineapple Bay lost nearly $1 million due to Shelley’s fraud. That loss amount increased the amount of prison time Shelley could get under federal sentencing guidelines.
Shelley said in court documents that prosecutors promised they would recommend a light sentence to the judge, stating at one point that they were not opposed to probation and “did not want Shelley to go away because he was the only one that told the truth in the investigation.”
However, John Potterfield – the assistant U.S. attorney who prosecuted the case – did not recommend probation at the sentencing hearing and Wooten sentenced Shelley to prison followed by three years of supervised release and restitution of at least $1,000 per month upon his release from prison.
Shelley’s appeal followed documents he filed in October claiming he was duped by a GMAC Mortgage loan officer who assured Shelley that an illegal plan to sell the townhomes was, in fact, legal. That plan called for Shelley to refund buyers 10 percent of their purchase as an “incentive” that was not shown on HUD-1 settlement statements. Shelley said GMAC also approved loans for Pineapple Bay purchases even though it knew the mortgage applications contained false information.
Shelley said in court documents that he did not know he was doing anything wrong and was acting on the advice of the loan officer.
Shelley also is disputing the nearly $1 million that GMAC claims it lost on the Pineapple Bay deals. Shelley said GMAC immediately sold the condo loans into the secondary market as mortgage-backed securities, thereby profiting from the deals rather than losing money.
Four Pineapple Bay buyers previously pleaded guilty to mortgage fraud charges and each were sentenced to between three years and five years of probation plus restitution.
Most of the buyers at the 12-unit Pineapple Bay project included Shelley’s family – including Shelley’s wife, his brother-in-law and sister-in-law – and friends or business associates. The original sale price for each of the 2,250-square-foot condos ranged from $625,000 to $700,000 in 2006, according to county property records. The most recent sales have been for between $135,000 and $157,500, according to statistics from the Coastal Carolinas Association of Realtors.