NORTHWEST ARKANSAS — Billy Craig Underwood, former mortgage broker at American Mortgage and owner of American Title and Escrow in Rogers, was sentenced Friday to nine years in federal prison for wire fraud.
U.S. District Judge Jimm Larry Hendren ordered the 50-year-old Underwood to pay $1.88 million in victim restitution and a $15,000 fine resulting from one guilty plea entered by Underwood in February.
Christopher Plumlee, spokesman for the U.S. Department of Justice, said Underwood will be self-surrendering to federal agents in the next 60 days. He will then be sent to a central holding facility in Oklahoma City until placed by the Federal Bureau of Prisons.
BY THE NUMBERS
Crimes Involving Mortgage Fraud in U.S.
67,190: Suspicious activity reports filed in 2009.
77: FBI Mortgage Fraud Task Forces working cases.
822: Indictments reported in 2009; 494 federal convictions.
$4 billion: Annual estimated losses
Source: Mortgage Asset Research Institute
Underwood used his company in a scheme to defraud nearly a dozen local residents who refinanced their homes with American Mortgage between October and November 2008, according to the court records.
Pedro Silva, Robert Acosta, Kimberly Gallagher and Connie Mills, were among 11 victims who claim they were solicited by American Mortgage about refinancing their homes.
Underwood prepared refinance documents for several home mortgages, indicating in the paperwork that the original mortgage would be paid in full from the proceeds of the refinance transaction. When funds were obtained from the new lenders, Underwood used the money for his own business and did not pay off the original mortgages, according to federal records.
The suit states Underwood attempted to cover up his crime by making the original mortgage payments on behalf of his customers. He was also accused of providing a fraudulent credit report to Silva when the victim questioned Underwood about the two mortgages appearing on his credit report.
Unfortunately, this type of white collar crime happens despite the industry's efforts to police itself said Walt Fenton, mortgage manager with First Security Bank and member of the Arkansas Mortgage Bankers Association.
Attempts to speak with Underwood following the sentencing were unsuccessful, because he doesn't have a listed phone number.
Underwood was originally charged with nine counts of wire fraud, nine counts of bank fraud and one count of money laundering. After he pleaded guilty to one count of wire fraud, the other 18 counts were terminated.
Underwood faced a maximum sentence of 20 years and fines up to $250,000. Judge Hendren denied Underwood's request for a downward departure in sentencing on the basis of family need, relating to care of an adult son who suffers from muscular dystrophy.
Underwood is also subject to three years supervised release after his prison term ends.
Underwood forfeited the office building at 3606 Southern Hills Blvd. in Rogers and 1.06 acres, otherwise known as Lot 3 in the Southern Hills Business Park, which are in foreclosure by Cornerstone Bank from Southwest City, Mo.
Marshall Ney is representing the bank in that foreclosure suit.
Any extra proceeds from the sale of the commercial property after the bank's debt is satisfied would likely go toward the victim's restitution fund, Ney said.