Local News

Man sentenced in mortgage fraud scheme

Posted February 25, 2009 1:19 p.m. EST

— A Raleigh man was sentenced Tuesday to seven years in federal prison in connection with a scheme to obtain mortgages based on bogus financial information, authorities said.

William Montelle Loyd III, 56, pleaded guilty to conspiracy to commit mail fraud, wire fraud and aggravated identity theft. He also was ordered to repay E-Loan more than $1.2 million.

Loyd and two women tried to defraud E-Loan, which offers mortgages and commercial loans online, authorities said. They submitted phony statements of income and employment history to obtain 16 mortgages between November 2002 and December 2006,  authorities said.

Loyd used his father's and his brother's identities and Social Security numbers in the scheme, authorities said.

The fraud cost the company about $2.6 million, authorities said.

Kelley Anne Spaulding, 38, of Durham, and Elizabeth Whitaker Clement, 46, of Raleigh, pleaded guilty last June to conspiring to commit wire fraud.

The case was part of Operation Malicious Mortgage, a government effort to crack down on mortgage fraud in the wake of lending practices that led to the collapse of the nation's credit markets.