Two California business partners were sentenced last week to serve prison terms for operating a mortgage fraud scheme in 2006 to 2007, said U.S. attorney Benjamin Wagner.
Garrett Griffith Gililland, III and Shane Burreson both pleaded guilty last year to mail fraud and money laundering stemming from their involvement in Nor-Cal Innovative Investments in Chico.
Gililland will serve a little less than eight year in prison, while Burreson was sentenced to 23 months in jail.
According to court documents, Gililland orchestrated a scheme that falsified the sales prices of approximately 46 homes he brokered in Chico subdivisions between 2006 and 2008. After the close of escrow, homebuilders would write kickback checks of $40,000 to $60,000 per home to various front-companies Gililland and Burreson controlled.
Meanwhile, the two defendants and eight other conspirators involved in this scam would then use this money to pay buyers $20,000 to $30,000 for purchasing the homes. However, none of the kickbacks were disclosed to the mortgage lenders who financed the properties.
Additionally, Gililland and Burreson arranged for straw buyers and investors to fraudulently obtain mortgages for the homes by falsifying income and employment histories.
“The fraud scheme in this case was audacious in scope, and those involved in the scheme are paying a steep price for their criminal conduct,” Wagner said.
But, the sentencing could have been worse for Gililland and Burreson than what was given to them by U.S. District Judge Edward Garcia. Garcia said he took into account the fact that Gilliland assisted the government in its prosecution of other mortgage fraud defendants against the scope of his fraud, his flight to Spain and extradition battle he fought.
Furthermore, in sentencing Burreson, Garcia stated that he credited the defendants’ early withdrawal from the scheme as well as his cooperation with the government and contributions he made to the community.
