Complex accounting delays sentencing for fraud

By The Associated Press

JACKSON — Eight people who pleaded guilty in Jackson up to five years ago in two federal mortgage fraud cases have yet to be sentenced because of the complex process to determine how much money was at stake.

Prosecutors say the frauds total millions of dollars, but a federal appeals court ruling has delayed their sentencing.

The 5th U.S. Circuit Court of Appeals said in 2008 that a loan-by-loan inquiry should be done to determine the actual loss on each loan and that amount should be used in determining the sentence range. That has forced the government to determine an actual loss, rather than using an intended loss or an overall loan amount.

Assistant U.S. Attorney Carla Clark told The Clarion-Ledger that the process is complex because in some cases, the lenders are no longer in business or loans have been sold to other companies.

The issue has delayed the sentencing of a Ridgeland-based mortgage broker and two associates found guilty in March 2010 of obtaining about $9 million in fraudulent home loans.

A jury convicted Mark Calhoun, 54, owner of Silver Cross Financial Group, on 36 of 38 counts. His associates, J. Larry Kennedy, 69, and son Keith Kennedy, 45, who operated Loan Closings and Title Services Inc. of Jackson, were convicted on all counts.

Calhoun and the Kennedys were scheduled for sentencing in July 2010. They are now set for a sentencing hearing on May 23.

In the case involving the six defendants, both sides have agreed on a Nov. 1 sentencing date.

The defendants are former Brandon real estate broker Jason Ellis, Joni Lynn Goss of Madison, former Greenville lawyer Bobby F. Fisher and former Ridgeland real estate broker John William Emory III, all of whom pleaded guilty in 2006. Matt Howard, of Canton, who pleaded guilty in 2007 and Michael Persac, of Madison, pleaded guilty in 2008.

The fraud cases stemmed from September 1999 to 2005, when charges were filed.

The appeals court ruling came in the case of Toby Goss. He pleaded guilty in 2006 to charges related to obtaining $2.2 million in mortgage loans by submitting false information on documents.

Goss, then of Consolidated Mortgage Corp. and Mississippi Mortgage Inc., was sentenced to 57 months in prison in 2007. He appealed, but didn’t contest the sentence. Instead, he disputed the loss calculation of the loan amounts used in determining the sentencing range for his scheme.

Clark said she hopes the U.S. attorney’s office can come to an understanding with attorneys for the six on actual loss amounts.

There are approximately 100 separate loans, Clark said.

“It’s a fluid process and the numbers change, normally to the benefit of the defendants,” Clark said.

Clark said other court rulings have provided guidance on how to calculate the loss on such loans. The Internal Revenue Service soon will have calculations on all the loans, she said.

The government is scheduled to submit its report on May 5.

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