Sentence In Another Mortgage Fraud Case Is 8 Months
posted March 29, 2007
An attorney for former Channel 9 weatherman Neal Pascal said he is facing up to six months in federal prison for mortgage fraud, but he should get probation.
Attorney Dee Hobbs said no bank suffered from his inflating the price of homes he bought so he could get more money on the loans.
Pascal was due to be sentenced on Thursday afternoon, but it was delayed until April 5 at 9 a.m. before Judge Curtis Collier.
Meanwhile, Judge Collier on Thursday gave an 8-month sentence to Kimberly Lynn Jones, who worked for a local mortgage company and was involved in submitting false sales amounts.
She must serve four months in prison and then four months in home confinement.
Judge Collier told Ms. Jones that mortgage fraud is a serious matter that could affect the nation's economy.
He said, "People who engaged in this type of conduct should not walk away without any punishment."
Attorney Hobbs, in a 9-page sentencing memorandum, said Pascal "contends that a sentence of imprisonment is not appropriate under the circumstances of his case, is not beneficial to the victims herein and in fact would be injurious to them, and would not serve the best interests of justice."
He said, "Because Mr. Pascal has fulfilled all financial obligations relative to the loans in question, the victim banks have literally profited from the transactions in question. Moreover, it has been noted that there is no indication of actual intent on Mr. Pascal's part to defraud anyone."
The attorney said of the loans paid off by Pascal, the lenders have made $563,548 in profit.
He said Pascal still owns 13 investment properties and he has met his payments on those even though he lost his job at Channel 9.
The memorandum said those who signed option contracts with Pascal to eventually purchase the homes "have also benefited from his treatment of them. A number of these persons would not have been able otherwise to obtain financing to complete a house purchase."
Attorney Hobbs said, "An unfortunate development for both Mr. Pascal and the victim banks was the termination of Mr. Pascal's employment from a local television affiliate last Sept. 22. Although characterized as a 'resignation,' the end of Mr. Pascal's employment was actually a firing."
He said Pascal earned $123,760 at Channel 9. The attorney said he has not been able to find other employment and is living off unemployment that terminates in April, rental income and his current wife's income.
Imprisonment of the defendant would jeopardize his ability to continue to pay off the loans, attorney Hobbs said.
He also said he had cooperated with the government from the first time he was questioned.
Attorney Hobbs said Pascal "readily acknowledges inflating the selling price of the transactions in question by about 10 percent to cover his down payments, but never in any greater amount."
On the Jones case, prosecutors said beginning in February 2002, Ms. Jones would seek to induce lenders to loan more money than they otherwise would have loaned by deceiving the lender as to the actual sales price of residential property.
She also misrepresented the amount of down payments made by borrowers, it was stated.
The false settlement papers were used to generate inflated fees, service charges and commissions, prosecutors said.
Ms. Jones then split the excess fees and funds with others, it was stated.
The indictment says one sale on a house on Freudenberg Lane in Red Bank was for $89,900, but the stated sales price was $100,000.
A house on South Moss Avenue in Chattanooga sold for $74,000, while Ms. Jones listed it at $85,000.
A tearful Ms. Jones apologized "for letting everyone down" - including her young son, husband and church.
She asked to be allowed to delay reporting to prison so she can see her son graduate from elementary school at the end of May. She must report June 1.
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