Hendersonville defendant's trial is reset for Sept. 16
By KATRINA CORNWELL • Gannett Tennessee • June 19, 2008
GALLATIN — Miles Jackson Black and Jeffrey Dunn Hathcock, both of Gallatin, have entered guilty pleas in federal court to conspiracy to commit wire and bank fraud as part of an elaborate $2.2 million mortgage fraud scheme.
The case involves the purchase of 22 luxury homes in Gallatin and Hendersonville by unqualified "straw" buyers, officials said.
The trial of a third defendant, Harold Stafford of Hendersonville, was rescheduled for Sept. 16, according to a news release issued by the office of the U.S. Attorney for the Middle District of Tennessee.
According to the federal indictment, the three men helped file false loan applications to mortgage lenders by overstating the incomes of fraudulent buyers; falsely saying that the homes would be their primary residences; and failing to disclose recent home purchases by the same people.
All of these mortgage loans ended in default and foreclosure, resulting in losses to mortgage lenders after foreclosure totaling about $2.2 million.
According to the indictment, Stafford, the owner of Stafford Lease Group, Stafford Holding Group and Keys to Success, agreed with the builders and sellers of the 22 luxury homes to find buyers who would buy the homes at prices that were $10,000 to $165,000 more than their original asking prices.
The builders and sellers agreed to pay Stafford any amount of the sale that ex ceeded the original asking price, federal court records show.
Authorities said Stafford recruited seven so-called straw buyers with good credit histories to apply for first and second mortgages on multiple properties where the purchase price was greater than the seller's original asking price, according to the indictment.
He then instructed them to apply for mortgage loans through an office of Allied Mortgage Co., managed by Black and Hathcock.
Black and Hathcock reportedly required the straw buyers to fill out Buyers Authorization Forms, giving the company permission to check their credit reports. The pair and an unidentified employee then forged the buyers' signatures on loan applications, according to the indictment.
The builders and sellers paid Stafford kickbacks between $10,000 and $165,000 in the names of his three companies, federal officials say. He, in turn, paid the straw buyers some of that money, federal court records state.
Black and Hathcock re ceived commissions on the mortgage loans. They each face up to 30 years in prison, a $1 million fine and supervision for up to five years.