LAS VEGAS -- The mastermind of a Las Vegas mortgage fraud scheme that caused roughly $15 million in losses to lenders and financial institutions received an 11-year prison sentence for his guilty pleas to conspiracy and fraud charges, Nevada's U.S. Attorney Daniel Bogden said.
Lloyd Gardley, 60, was also ordered Wednesday by U.S. District Judge Gloria Navarro to pay more than $1.4 million in restitution. Gardley, who is in federal custody in Pahrump, pleaded guilty in August 2012 to one count of conspiracy to commit bank fraud, mail fraud and wire fraud, one count of bank fraud and two counts of mail fraud.
"Unfortunately, these crimes are not victimless and the damage to the community is lasting," Bogden said. "The mortgage fraud scheme artificially inflated home values that, in turn, raised purchase prices of comparable homes, forcing innocent homebuyers to pay well above true market value for their homes."
Ten persons were charged and convicted in the scheme, which occurred between 2005 and 2007 and involved straw buyers and the submission of fraudulent paperwork to obtain mortgage loans. Gardley was considered to be the leader of the conspiracy and recruited others into the scheme, including loan officers, real estate agents, an escrow agent and an accountant.
Once the mortgage loans were approved, the defendants diverted the money for their own use. The defendants typically rented homes and re-sold them for a profit, using the same scheme. The evidence showed that the defendants used the scheme to purchase 30 homes in Las Vegas.
The total value of the mortgages was roughly $35 million. Some homes were "flipped" or sold twice within short periods of time.
The case was investigated by the U.S. Postal Inspection Service and prosecuted by Assistant U.S. Attorneys Sarah Griswold and Brian Pugh.