Two men from Tucson, Ariz., were sentenced to federal prison for their roles in a mortgage fraud scheme that resulted in lenders losing at least $3.1 million.
William Naponelli, a former real estate developer and loan officer, will serve two years in jail for pleading guilty to the felony offenses of conspiracy to commit bank fraud and conspiracy to commit transactional money laundering.
Naponelliís co-conspirator Bryan Atwood, who was a licensed real estate agent, was sentenced by U.S. District Court of Arizona Judge Cindy Jorgenson to 15 months in prison. Atwood pleaded guilty to conspiracy to commit wire fraud.
In his guilty plea, Naponelli admitted that he worked with another co-conspirator to obtain various loans between July 2006 and May 2007 in order to purchase several properties using various business entities. The conspirators then sold these properties to straw buyers.
As part of the loan approval process, Naponelli knowingly submitted documents that contained material false statements including representations that the borrowers would provide the downpayment or cash to close the real estate transactions. After the fraudulently obtain loan proceeds were received, portions of this money were wired into bank accounts controlled by the conspirators.
During this scam, Atwood was the purchaser of these properties that were acquired through fraudulently obtained loans. Atwood admitted that he knew the documents given to the lenders contained inaccurate information and data.
The properties obtained as a result of this fraud scheme went into foreclosure.
Judge Jorgenson ordered Naponelli to pay restitution totaling approximately $3.1 million. Meanwhile, Atwood had to pay about $585,000 in restitution.
Naponelli and Atwood are the third and fourth co-defendants to be sentenced in this case. Previously, Walter Fruit, a licensed real estate agent, and Sandra Jackson, a former escrow agent, were ordered to serve a 30-month and six-month prison term, respectively.