Snow to serve 2 years in prison

Carrie Snow was sentenced to over two years in federal prison Monday for her role in a multi-million dollar mortgage fraud scheme in Bedford County.

Snow will serve a total of 27 months, followed by three years of supervised probation, according to notes from the proceedings held before District Judge Harry S. Mattice Jr. in Chattanooga.

Snow was ordered to pay $911,478 in restitution to a list of payees listed on her judgment, which was not available at press time. She will also have to pay a $200 special assessment, and receive 500 hours of substance abuse treatment.

Mattice also recommended that Snow be assigned "as close to family as possible."

Snow, along with Roger Ritch, William T. McMahan and Jonathan Henderson, was charged in May with bank fraud and money laundering in a scheme involving hundreds of homes in Shelbyville. Bradley Aydelott was indicted on the same charges in July.

McMahan, identified in federal documents as the instigator of the scam, was sentenced last month to six and a half years in prison and was ordered to pay over $2.4 million in restitution.

All have pleaded guilty to counts one and four of the federal indictment, stating that they obtained financing under false pretenses and falsely represented the employment status and income of borrowers.

Snow remains on bond and must surrender herself to the custody of U.S. Marshals to begin her sentence on Jan. 13, 2010.

"Held accountable"

Snow's attorney, William C. Killian, had asked the court for a "downward departure" on her sentence and on Friday, documents were filed by Assistant U.S. Attorney Gary S. Humble that opposed that motion.

The downward departure motion was denied by Judge Mattice on Monday.

Humble stated that Snow "clearly deserves a guideline sentence" but went on to say that Snow's "guideline range should be reduced by two levels."

"We agree that a two-level reduction is appropriate because we cannot disprove her claimed ignorance about the full scope of the scheme," Humble wrote. "While we think it highly unlikely that she did not know, we will give her the benefit of the doubt."

Snow claimed that since she was unaware that the buyers of the houses could not afford them, "she should only be responsible for those loans in which she and McMahan cheated those buyers by borrowing more than the purchase price."

Snow had also filed a downward departure motion, claiming that she would not have a caretaker for her autistic child, but Humble stated that during a previous sentencing hearing, it was apparent "that there are others who can and will care for the child."

Humble told the court that Snow "needs to be held accountable for her crimes."

"She knowingly cheated people who could barely afford to buy these homes, if at all, and saddled them with even more debt to line her pockets by inflating the amount of money they were borrowing," he wrote.

"Thus, the poor buyers were borrowing money they certainly could not afford to repay and guaranteeing that they would lose their house and whatever credit they had earned over the years. Their children lost these homes."

County impacted

Humble said that a guideline sentence in Snow's case is appropriate for many reasons, explaining that the mortgage scheme "caused widespread harm to three classes of victims: the borrowers, the lenders, and Bedford County property owners."

Snow "cheated many buyers to line her own pockets without regard to the effect it would have on them," Humble said. "She also cheated the lenders and thereby personally contributed to the fraud crisis that has devastated our economy."

But Humble also stated that the third class of victims "are the homeowners in Bedford County whose property values have suffered directly as a result of this conduct."

"So many of these houses were sold at inflated prices that buyers and appraisers have no confidence in property values," Humble wrote. "It is our understanding that this has had a very adverse effect on the market."

Humble said that the sentencing guidelines in Snow's case and most white collar cases are too low, adding that "anything less than 33 months in the instant case would almost amount to a token sentence."

"More than a token sentence is necessary to punish this defendant and to deter others," Humble wrote.

The Bedford County Sheriff's Department says 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.

According to federal documents, a total of 61 people in Shelbyville who bought homes lost them through foreclosure as a result of the scheme.

Ritch faces a sentencing hearing on Jan. 4. Henderson is to be sentenced on Dec. 21 and Aydelott will appear in federal court on Jan. 21 to learn his punishment.