Former Channel 9 weatherman Neal Pascal was charged Friday by federal authorities in a mortgage fraud case.
Authorities said he has agreed to plead guilty and will cooperate with the government.
Pascal, a familiar personality on local TV for three decades, had a one-count bill of information filed against him Friday.
It charges him with "knowingly making, using, and causing to be made, a materially false document in connection with the sale of real estate in Chattanooga, Tennessee, in violation of Title 18, United States Code, Section 1001."
Officials said, "Mr. Pascal entered
into a plea agreement with the United States, in which he agreed to waive indictment and plead guilty to the
Bill of Information. He further agrees to cooperate with the ongoing investigation."
On Thursday, Kimberly Lynn Jones pleaded guilty in federal district court before Judge Curtis L. Collier to one count of wire fraud in connection with a loan obtained to purchase property in Red Bank. Her plea was entered pursuant to a plea agreement.
Officials said, "The instant charge stems from a three-year investigation into mortgage fraud. To date, two individuals have been convicted and sentenced and charges are pending against five other individuals.
"The fraud alleged in these cases involved the defendants inflating the sales prices of real estate in order to obtain more money from the lender. The lenders included federally insured financial institutions.
Closing documents, including the settlement summary sheet known as a HUD-1, were falsified, as were the loan applications themselves.
"It is the falsification of these settlement papers that constitutes the false statement in violation of 18 U.S.C. § 1001 with which Mr. Pascal is charged."
The maximum penalty for each violation of §1001 is five years in prison and a $250,000 fine.
The maximum penalty for wire fraud is 20 years in prison. The court may also order restitution.
Angela Marie Byrd and Donavan Barnes-Bass were convicted on Sept. 2, 2005, of conspiracy to commit bank fraud, wire fraud and to make false statements. They were each sentenced to 18 months imprisonment and ordered to pay restitution of $191,030.26.
Mark Estill Wilkens and Jay Ann Snyder were indicted by the grand jury in Chattanooga on July 25, 2006, for wire fraud and false statements. No trial date has been set.
On Oct. 25, 2006, the grand jury in Chattanooga indicted Darren Todd Moyer, Phillip Howard McKinnish and Jennifer Jewel Hanson for bank fraud and wire fraud. Their case has been set for trial on Dec. 18.
These cases were investigated by the Federal Bureau of Investigation.
Pascal recently left Channel 9, and his replacement will be former Channel 3 weatherman David Glenn.
Pascal released this statement to Channel 3:
"I have agreed to plead guilty to one-count information of making false statements on HUD (Housing and Urban Development) forms in relation to real estate purchases.
"I believe the authorities with whom I have been working will confirm I have been honest, helpful and cooperative in this investigation from the beginning.
"Back in 2001 and 2002, I purchased a number of real estate properties in this area using a no-down-payment method in the wrong manner. I typically identified properties that were for sale by owner and negotiated a favorable purchase price. I requested that the owner agree to an inflated sales price in order to enable me to borrow more money from the lender. The seller would refund me the approximate difference at closing. The difference would usually represent an amount close to the down payment I made. This allowed me to purchase the property without making a permanent down payment of my own money.
"This necessitated the use of inaccurate settlement papers at closing, including a HUD form. These documents were prepared at closing with the knowledge and participation of the mortgage broker and title company.
"This in no way affects the good and fair working relationship I have with the people I am doing business with in the remaining houses I purchased years ago. In fact, I believe that all properties in question are worth more than any outstanding debt owed against them.
"Regarding my charge, it is important to remember that everyone's situation is different. For my part, I did not steal any money from any party, and have continued to pay back every loan in a timely manner. Rest assured, I intend to be a good citizen, and will continue to be honest, cooperative, and helpful with the authorities.
"This information will be filed shortly at the federal courthouse."