Neal Pascal Enters Guilty Plea To Mortgage Fraud

He Is Free On Bond Until Sentencing March 29

Thursday, December 14, 2006
Neal Pascal
Neal Pascal
- photo by Drawing by Wes Schultz

Former Channel 9 weatherman Neal Pascal pleaded guilty in Federal Court Thursday morning to a mortgage fraud charge.

Pascal, 51, appeared before Judge Curtis Collier.

He afterwards went before a federal magistrate to get a bond.

His sentencing was set for March 29 at 2 p.m.

The bill of information says he inflated the price of a house he bought so he would get enough cash back on the loan to cover his down payment.

A six-page plea agreement was filed at the same time as the two-page bill of information.

Prosecutor Gary Humble says Pascal faces up to five years in prison and up to a $250,000 fine. But the plea agreement indicates he could get much less by his guilty plea and by cooperating with federal officials in prosecuting others.

Pascal is charged with a single count of filing a false statement.

The bill of information says he "did knowingly make and use and cause to be made and used a false writing and document, knowing the same to contain a materially false statement and represent the sales price to be $129,000 on a HUD settlement statement form. . ." That was April 29, 2002.

The actual sales price was $110,000 on the house at 2416 Corral Trail in Chattanooga, officials said.

Prosecutors said Pascal purchased a large number of real estate properties in the Chattanooga and North Georgia areas.

The plea agreement says he typically identified properties that were for sale by owner. He would negotiate a sales price, then request that the owner "agree to an artificial and inflated sales price in order to enable him to borrow more money from the lender."

The seller would agree to refund the difference to Pascal at closing, officials said.

The plea agreement says, "The difference usually represented the down payment and allowed the defendant to purchase the property without having to make a permanent down payment that required use of his own money."

The plea agreement says, "The defendant's scheme involved the preparation of false settlement papers, including a false HUD-1 form."

It says the documents were prepared at closing with the knowledge and participation of the mortgage broker and the title company.

The HUD-1 form provides that it is signed subject to penalty of perjury and subject to prosecution under federal law, it was stated.

On the Corral Trail property, Pascal agreed with the seller to inflate the sales price. The false HUD-1 form listed the sales price at $129,500.

Executive Title Company prepared the false HUD form.

Officials said after the closing, the seller wrote a check to Pascal for $19,500, "representing the additional money received from the lender as a result of the fraud."

The lender was ABN AMRO Mortgage Company of Michigan.

The plea agreement says Pascal is required to meet with prosecutors and officers whenever requested and to testify before a federal grand jury and a trial jury if requested.

The agreement says if Pascal "provides substantial assistance," then "the United States will file a motion or motions at the appropriate time" on cutting his penalty.

Dee Hobbs is the attorney for Pascal.

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