Jerry Kerley was sentenced in the Eastern District of Tennessee to serve four years in prison for wire fraud, bank fraud, and money laundering all stemming from a mortgage fraud scheme.
Kerley was indicted last May, along with Jeffrey Whaley, with conspiracy to defraud Citizens Bank and SunTrust Mortgage. The indictment alleged that the mortgage fraud scam involved straw borrowers who were induced to obtain mortgage loans in their names based on promises that they would not have to make a downpayment or mortgage payments for the property. Furthermore, the straw borrowers would receive cash at closing and share in the profit following a resale of the property.
Additionally, the indictment claims part of the conspiracy included making materially false representations to Citizens Bank and SunTrust Mortgage related to the straw borrowers’ source of funds for downpayments and amounts recorded as “cash from borrower” on HUD-1 settlement statements and loan applications. This was meant to induce the lenders to disburse the mortgage loan proceeds it had wired to and entrusted with Kerley’s title company Guaranty Land Title.
According to the indictment, the scam involved eight transactions in which the defendants concealed from the lenders that the borrower did not provide at the closing the money identified as the cash from borrower on the HUD-1settlment statements.
In those eight transactions, Citizens Bank and SunTrust Mortgage wired more than $6 million in loan proceeds to Guaranty Land Title Company for disbursement.
Kerley, a licensed Tennessee attorney, was the owner of Guaranty Land Title Company where the fraudulent loans were closed.
