Former Georgia Mortgage Broker Pleads Guilty to Fraud Charges

Edward William Farley, a former mortgage broker from Georgia, pleaded guilty in federal district court to charges stemming from a mortgage fraud scheme and a related real estate investment Ponzi scam involving more than 150 victims. According to Sally Quillian Yates, acting U.S. attorney for the Northern District of Georgia, Farley, operating through numerous mortgage firms, defrauded mortgage lenders through same-day property flips throughout the state. He paid an appraiser to fraudulently inflate the value of each property by $50,000 to $100,000 and recruited unqualified borrowers to purchase them from one of his companies. However, Farley did not purchase the properties until the fraudulently obtained loan proceeds on the second purchase had been disbursed. In the real estate investment-Ponzi part of the scheme, Farley then began to operate under the name Alliance Resource Management to conceal his new source of income from prior victims. Real estate investors and lenders were induced through false promises that their investments and loans were fully secured. The same property was used to "fully secure" multiple investors and lenders, causing losses in excess of $20 million. Sentencing is scheduled for Feb. 3, 2010.