Local mortgage principal Billy Craig Underwood of Rogers faces both civil allegations and federal criminal charges involving financial misconduct affecting nine local families.
The local homeowners filed a civil suit in Benton County Circuit Court on Tuesday that seeks $2.8 million from Rogers-based American Mortgage and American Title Companies and from Underwood.
Two messages left at American Mortgage of Rogers were not returned Thursday as the business was closed for the Christmas holiday. Underwood does not have listed home phone number.
Pedro Silva, Robert Acosta, Kimberly Gallagher, Connie Mills and five other parties referred to as John Does 1-5, each refinanced their mortgages using American Mortgage of Rogers with closings between October and November 2008, the filing states.
The plaintiffs claim they were solicited by American Mortgage about refinancing their homes in late 2008. In each case the filing states “Craig Underwood and American Title withheld, misappropriated and converted a total of $567,041 that should have been transmitted to satisfy the borrowers’ original mortgages. The said money was then used for Underwood’s own personal gain.”
The suit claims Underwood tried to conceal the deceit by personally making payments toward the plaintiffs’ original mortgages that should have been retired in full once the refinance closing was completed. He is also accused of providing a fraudulent credit report to Silva when the plaintiff questioned Underwood about the two mortgages appearing on his credit report, the filing notes.
On Oct. 2, the Arkansas Department of Insurance suspended American Title’s licenses and a revocation hearing is pending, according to state records.
Last month, U.S. Attorney Deborah Groom froze assets owned by Underwood located at 3606 Southern Hills Blvd. in Rogers. Those assets included: the primary business premises of American Mortgage of Rogers, American Title and Escrow and Eagle Realty, according to an indictment signed by Groom.
On Nov. 4, Underwood was indicted on multiple counts of federal wire fraud and bank fraud and money laundering by the U.S Department of Justice. He was arraigned and released on $5,000 bond Dec. 10, according to federal criminal filings.
A jury trial is set for Feb. 2, 2010 at the U.S. District Court in Fayetteville, unless the defendant enters a guilty plea beforehand, the government filing noted.