Mortgage fraud suspects released on $20K bonds

The four individuals charged with bank fraud and money laundering earlier this week have been released after signing an agreement with federal prosecutors.

Roger Ritch, of Shelbyville, along with William McMahan, Jonathan Henderson and Carrie Snow, all of Murfreesboro, appeared before a federal magistrate in Chattanooga Tuesday, following their arrest in connection with an alleged multi-million dollar mortgage fraud scheme involving hundreds of homes in Shelbyville.

Sheriff Randall Boyce said the indictments were explained to the four by Assistant U.S. Attorney Gary Humble and the federal magistrate, as well as what punishment they could face.

The combined sentences could be very lengthy and the fines quite substantial, Boyce said.

The agreements the four signed require a $20,000 bond that can be revoked by the federal judge if the suspects do anything to violate the terms -- even a traffic ticket could place them back in federal custody.

"It's not a good idea for them to do anything," Boyce said Thursday morning.

The indictments allege that the four devised a scheme to obtain financing under false pretenses for purchasers of residential properties developed by American Value Homes, a construction company that Ritch owned in Shelbyville.

As part of the scheme, the indictment alleges that the defendants did business as Mortgage Processing Services and Value Title, preparing loan applications containing false information, misrepresented the down payment amount made by borrowers, and falsely represented the employment status and income of borrowers.

According to the sheriff's department, the scheme involved the sale of houses by Ritch's company totalling approximately $30 million, and foreclosure on the fraudulent loans has resulted in a loss to lenders totaling approximately $2.4 million.

On Wednesday, Boyce also downplayed speculation posted by citizens on the Times-Gazette website regarding the possible involvement in the alleged scheme by Peoples Bank of Bedford County.

"People's Bank has never been the focus of this investigation," Boyce said. "And no employee of Peoples Bank is under suspicion or has been under suspicion in any part of this. They have nothing to do with this investigation."