A 36-year-old former Fort Wayne mortgage broker must pay more than $2 million in restitution for his role in a 2002 mortgage scam that resulted in 150 foreclosures, mostly in Fort Wayne’s inner city.
On Thursday, U.S. District Judge Theresa L. Springmann sentenced Justin L. Stuckey to 18 months in federal prison and ordered him to pay nearly $2.3 million in restitution for his role in the scheme.
While he was the only person ever indicted, federal prosecutors and Stuckey’s defense attorney said Stuckey’s role in the fraud was minimal and that he was never the big fish identified when the investigation began.
Assistant U.S. Attorney Leslie Miller-Lowery would not comment on whether an investigation into the fraud continues.
Stuckey was indicted in May 2007 on five counts of wire fraud, to which he later pleaded guilty. According to court documents, Stuckey owned Maximum Mortgage, a local brokerage firm that obtained loans from a number of lenders, in this case ABN Amro Bank.
At the time, before the collapse of the housing market and risky lending practices came to light, ABN Amro offered a Fastest Loan Yet program, which allowed select brokers to approve loans on their own with much less documentation than more traditional loans.
Using the FLY program, Stuckey processed dozens of loans for three buyers who were to purchase rental properties from Rex Wells and Alliance Property Management.
Stuckey offered loan applications that claimed, among other things:
The three buyers were refinancing the houses.
Owners had 20 percent equity in some of the homes.
Some of the rental properties were occupied when in fact they were vacant.
According to federal sentencing guidelines, Stuckey should have faced a minimum of nearly four years in prison. But both sides argued he made little money for each transaction, about $1,800, and had otherwise led a law-abiding life, lured into the scheme by a promise of fast cash.
He was one of the smaller players in this colossal financial debacle, defense attorney Don Swanson said. Springmann agreed, sentencing Stuckey to 18 months in what will likely be a minimum-security prison.
Restitution will carry the greatest punishment, she said during sentencing.
Stuckey will spend three years on supervised release and will begin paying off the $2,294,628 in restitution at the rate of $150 a month upon his release from prison. He is to surrender himself to the Bureau of Prisons when he receives notice of where he will be housed, which could be in 30 to 45 days, Springmann said.
Nearly $2 million of the restitution will go to Citi Mortgage, which bought ABN Amro’s mortgage arm in January 2007. The remaining money will be paid to Alcover Insurance, Springmann said.
Because of Stuckey’s financial situation, no interest will be charged on the restitution, and the fines were waived.