Woman Testifying In Fraud Case Says She Was Promised $500 For Signing Gift Letters To "Cousins"

Wednesday, April 10, 2013

A witness in the fraud trial of Joshua Dobson and Paul Gott testified Wednesday that she was promised $500 payments for signing gift letters to supposed relatives.

Sherlene Connor said she wound up signing several of the letters for various "cousins" including one for a former boyfriend.

The Florida woman testified in the courtroom of Judge Curtis Collier at Chattanooga Federal Court in the trial involving lot sales at The Preserve in Dade County, Ga.

Ms. Connor said she dealt mainly with Gott in finding individuals with good credit who would agree to "buy" lots at high prices with promises that the seller would furnish both the down payment and the monthly mortgage payments.

She said on one occasion she came up to The Preserve and had a long talk with Dobson, who stressed that "integrity was very important to him."

Ms. Connor was quizzed by Dobson attorney Chris Townley, who asked, "You were willing to commit a crime for 500 bucks?" She acknowledged she was. She said there has been no mention of arresting her.

Dewayne Giles, the former Connor boyfriend, said she told him about a deal where he could make money and not have to make any payments. The guard at a detention facility for illegal immigrants signed up for a $150,000 lot at Johnson's Crook. He was given a gift letter showing Ms. Connor as his cousin, and he was furnished a $22,000 check for the down payment.

He said the payments were made for a year, then they stopped. He said he managed to make four payments before he could no longer keep up.

Tahira Malik, an Oakland, Calif., Head Start worker, said she was also recruited for one of the free lot deals. She said she was contacted by family members in Virginia. Her cousin's niece, Tonia Malik, provided her with the gift letter.

She said Gott was directing how the program worked. She provided an email in which he said his instructions "must be completed in this order and must be followed to a T."

She said she eventually began getting letters from a bank saying she was in default.

Ms. Malik said she was paid $15,000 for getting involved in the deal. She said the check to her was signed by Travis Shields, another individual involved in dealings with Dobson, though he has not been charged.      

Lynnette Price, a bank review analyst from Raleigh, N.C., and Jerry Salzer, a fraud investigation manager from near Cincinnati, both said banks would not approve loans if it was known that the buyer was not putting up any money or making the payments.

Both also said they were unfamiliar with a deal where the seller had an upfront agreement to eventually "option" the lot back.

Ms. Price said, "If the down payment is not 100 percent from the buyer, they are not going to make the loan."

She added, "If you put 25 percent down, you are much less likely to stop paying and walk away."

Ms. Price said, "I have never worked for a bank that allowed any option for the seller to buy the property back on a lot loan."

She said her bank lost $150,000 on one of The Preserve loans.

Mr. Salzer said Fifth Third Bank lost $130,800 on another.

Asked a motive for the free loan deals, she said the developers would be able to say to potential buyers with money, "Oh, that one sold for $175,000."

 

 


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