Investigator: Sentences too short in fraud case

Sgt. Brian Farris

After a three year investigation into a multi-million dollar mortgage fraud scheme, Detective Sgt. Brian Farris of the Bedford County Sheriff's Department is finally speaking his mind about the sentences handed down by a federal judge in the case.

And Farris is not happy.

Home builder Roger Ritch was given a 39-month sentence on Monday and must pay over $2.2 million in restitution to lenders who were defrauded in the scheme, but Farris believes that U.S. District Judge Harry S. Mattice Jr. was far too lenient to those involved in the conspiracy.

"I think it's a slap in the face to the victims, it's a slap to the face of the people of this county, and it's a slap in the face of justice, what that judge did," Farris told the T-G this week.

According to federal sentencing guidelines, Ritch could have received a minimum of 51 months for his role in the scheme, but federal prosecutors were asking for 70 to 87 months for Ritch in their last court filing.

Farris said that Mattice gave sentences that were "no more than a slap on the wrist for the damage that was done."

"That judge sat down there and said there's not two sets of standards for the rich and the poor, but I'm not so sure based on what I've seen and heard," Farris said. "It's a travesty."

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

All 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. McMahan was sentenced last November to six and a half years in prison and was ordered to pay over $2.4 million in restitution.

Snow received a 27-month sentence and must pay $911,478 in restitution and Henderson received a 20-month sentence and must pay $254,322 in restitution. After serving their federal sentences, the four will be under three years of supervised probation.

Aydelott's sentencing has been reset for March 8, but Farris now says there is no need for him to be there for the hearing.

Long investigation

Farris has been working on the case surrounding Ritch, McMahan and American Value Homes, Ritch's company, since November 2006, but he added that the so-called "secondary conspiracy" which involved homes in Greystone Subdivision was never part of the investigation.

Farris explained that American Value Homes had sold houses to individuals who, in turn, did lease/purchase agreements with buyers. But American Value Homes and Ritch had nothing to do with those lease/purchase agreements, he said.

People in Greystone Subdivision were told they had been making payments on their homes, but the four individuals -- John Henderson, Jeff Dotson, Mark Charlton and McMahan's girlfriend Molly Worrell -- failed or refused to satisfy the mortgages relating to those properties, resulting in the houses being foreclosed on and the families losing their investments as well as the roof over their heads.

According to federal court documents, the four individuals each allegedly bought multiple houses from Ritch, and even though they were listed as "owner occupied" on the title documents, the buyers had bought the homes as rental property.

McMahan and Snow came up with the scheme where Snow would be paid $2,000 per purchase in return for falsifying HUD filings showing that the properties were to be owner occupied, the documents said.

The detective said the situation in Greystone was not a focus of the investigation, because it is a civil matter, but investigators were aware of it. Investigators zeroed in on the false documents, forgery and fraud related to American Value Homes and Value Title, Farris said.

When the T-G published a story about what was happening with the families who lost their homes in Greystone in January 2008, the investigation into the fraud was already well underway, and the stir the disclosure caused resulted in investigators "backing off for three months to let everything die down."

When the situation "calmed down," the investigation continued "full tilt," Farris said.

Not the only victims

Farris explained that it wasn't just the victimized home owners that have suffered because of the scheme, but their neighbors as well.

"It affects the person next door and across the street, whose property is now worth many thousands of dollars less than it was because of this," Farris explained.

Property values have bottomed out in Bedford County because of the scheme, the detective claimed, adding that "most of the real estate people in the county are telling me the same thing, and it has affected their livelihood too."

"People that had absolutely nothing to do with this, now their property is not worth as much, they're upside down because of it, yet that judge sits down there and says he's going to give out a sentence way below guidelines," Farris said, adding that the sentence Ritch got "was not enough for the damage that he's done."

Farris says that all throughout the sentencing phase of the case, the prison terms handed down from Mattice have been low, with Farris saying that the federal judge has shown "an unwillingness to send a message of deterrence to white collar crime .... Why, I don't know."

The detective also said it has been hard for him to face the victims of the scheme, which at the first of his investigation, numbered "a couple of hundred."

One of the victims of the conspiracy, who asked not to be identified, said he has been dealing with the repercussions of losing his home for the past five years and it will impact him for at least the next seven years.

Farris also said that homes in Bedford County are still going into foreclosure today because of the fraud committed by Ritch and the others.

"Gave him a break"

Farris praised Assistant United States Attorney Gary S. Humble, who worked on prosecuting the case "and made the points that should have been made."

"He fought this thing with us tooth and nail," Farris said of Humble. "He did everything he could possibly do short of getting himself in trouble."

Assistance from the FBI, particularly Special Agent Richard Poff, and help from the IRS "to do the numbers" was also highly praised.

"Everyone did their part, it was prosecuted like it should be, but when it come time for sentencing, the victims got short changed," Farris said.

Humble had explained to the T-G last year that the fraud victims will have to file a civil or class action suit against the conspirators to recover damages.

Farris continued to have nothing good to say about the sentences Mattice has handed down in the case.

"These federal judges are appointed for life, they don't have to give a reason for what they do," Farris said. "He chose to give him a break," the detective said of the sentence given to Ritch, pointing out that Mattice used those very words before passing sentence on Monday.

"He can do that from his ivory tower, he doesn't have to deal with the victims. He doesn't live here, he doesn't see how this has affected everyone," Farris said.

Before Ritch was sentenced on Monday, Mattice handed down a 10-year prison term to a drug dealer, and Farris is wonders why a person who he blames "for destroying the housing market in Bedford County" should get a sentence of a little over three years.

"I'm having a real hard time understanding why ....what makes him (Mattice) think that these people (Ritch and the others) deserves a break."