North Carolina Appraiser Pleads Guilty

Michael Gee, a Mooresville, N.C-based real estate appraiser, pleaded guilty in connection with his participation in a mortgage fraud scheme involving about $15 million in loans and more than 200 properties. Gee, along with Victoria L. Sprouse and Michael D. Pahutski, both of Charlotte, N.C., were charged in a superseding indictment in Federal District Court for the Western District of North Carolina with perjury, conspiracy to commit money laundering, mail, wire and bank fraud. Ms. Sprouse, a licensed North Carolina real estate attorney, and Pahutski, a mortgage broker, were alleged in the indictment to have participated in a scheme from 2001 through September 2002, in Mecklenburg County, N.C, to obtain money and property by means of false and fraudulent pretenses, representations and artifices to defraud financial institutions of money and their right to honest services. Specifically, Ms. Sprouse and Pahutski were accused of preparing materially false mortgage applications and supporting documents to submit to lenders for approval. The defendants also allegedly prepared and signed materially false HUD-1 settlement statements, appraisals and accepted downpayment checks from persons other than the buyers listed in the HUD-1 settlement statements. Pahutski pleaded guilty and awaits sentencing. Ms. Sprouse has pleaded not guilty and is scheduled to go on trial March 23. She could not be reached for comment at press time.