CARY: Developer gets prison term for real estate fraud - WFLA News Channel 8

Cary developer gets prison term for real estate fraud

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RALEIGH, N.C. -

A Cary developer was sentenced to 96 months in prison, followed by five years of supervised release, on charges of Conspiracy to Commit Mail, Wire, and Bank Fraud, the U.S. Attorney's office announced Tuesday.

David Lewis Johnson Jr. was also ordered to pay $2,413,605.89 to 11 banks and lenders who were victims of the fraud, authorities said.

The U.S. attorney's office said Johnson, operating through E-Z N Homes, engaged in a real estate "flipping" scheme.

Authorities said Johnson and others utilized various schemes to fraudulently obtain more than 100 properties with total mortgage loans in excess of $20 million. The defendant used straw buyers to purchase properties in exchange for a kickback from the loan proceeds. Johnson also fabricated investment statements to make it appear that straw buyers had, in some instances, $1 million in assets, authorities said. In fact, the straw buyers recruited by Johnson did not possess the income or assets to support the loans obtained in their names.

As a result of the scheme and Johnson's conduct, banks and lenders issued loans to the conspirators in the amount of approximately $9.1 million, which resulted in $3.4 million in actual losses to the banks and lenders.

 

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