Fraud and Prevention

Former Georgia Real Estate Attorney Pleads Guilty to Investment Scheme

By James Comtois
July 22, 2009

After running a real estate Ponzi scheme for more than five years in three states and scamming more than $2 million from his victims, a former real estate attorney from McDonough, Ga., pleaded guilty in Federal District Court to wire fraud.

Steven H. Ballard pleaded guilty before District Judge Thomas W. Thrash Jr. to committing a real estate investment scheme that defrauded more than a dozen victims in Georgia, Florida and Tennessee.

According to U.S. attorney David E. Nahmias, Northern District of Georgia, Ballard admitted that from September 2002 through May 2006, he operated a fraudulent real estate investment scam where he told victims he was making "lucrative" real estate and other investments, which were not actually transacted.

To conduct the scheme, he often used bogus HUD-1 settlement statements, warranty deeds and sales contracts to reflect nonexistent property purchases, while using a portion of the scheme proceeds to repay former victim investors. The repayments included their principal plus substantial "returns" often exceeding 50% of the initial investment, but those repayments were all funded with money from new victim investors.

In Georgia alone, Ballard solicited funds from investors in Duluth, Dunwoody, Fayetteville, Jackson, Jonesboro, Newnan, Palmetto, Peachtree City and Whitesburg. Ballard also solicited funds from victims in Florida and Tennessee. All told, he collected more than $2 million as a result of this scheme.

The State Bar of Georgia suspended Ballard's law license in September 2005. He was disbarred in May 2006.

Judge Thrash has scheduled sentencing for Sept. 29.