A former mayoral candidate in Bartow County was sentenced to federal prison Friday for a mortgage fraud scheme involving kickback, arson, luxury vehicles and a private airplane, authorities said.
H. Gregory Cordell, a real estate broker and developer who had run for mayor of Cartersville, was sentenced to 2 years 3 months in a federal penitentiary followed by five years of supervised release. He also was ordered to pay more than $1 million in restitution.
“This defendant not only lied on mortgage applications to get over $1 million in loans, he fraudulently inflated the purchase price to get a bigger mortgage and then was paid a kickback under the table from the proceeds,” U.S. Attorney Sally Sally Quillian Yates said in a news release.
“The defendant, through his fraudulent actions and, later, his extravagant purchases of airplanes and luxury vehicles, exhibited a selfish greed that he will now have to answer for,” Brian D. Lamkin, special agent in charge of the FBI’s Atlanta Field Office, said in the same release.
The 46-year-old Cordell pleaded guilty last Nov. 30 to bank fraud. He was sentenced Friday by U.S. District Court Judge Charles A. Pannell Jr.
Prosecutors described how the scheme worked:
In March 2003, Cordell paid $1.25 million for a house and six acres at 179 Old Mill Road, Cartersville. The property had been listed for sale at about $950,000. Cordell and the seller agreed to inflate the sales price by more than $300,000 and obtained an inflated mortgage loan from Washington Mutual.
Unknown to the bank, the seller kicked back $307,000 to Cordell after closing. In his loan application, Cordell also overstated his annual income, understated his financial liabilities and said he owned several properties that he no longer owned.
Cordell refinanced the property in August 2004 and obtained a $1 million loan from Washington Mutual. He withdrew $62,500 in equity. His loan application repeated the false claims about his income and assets.
The evening of Sept. 1, 2004, the house was destroyed by an arson fire as Cordell and his family were driving to Florida for a vacation. Because of the timing of the fire, Cordell never made a payment on the new mortgage. His insurance paid off the mortgage while it investigated the arson.
With the mortgage lien lifted, Cordell sold the property in October 2005 for $900,000 and spent the proceeds without reimbursing the insurer.
“Including the kickback, refinance and sale amounts, Cordell thus pocketed about $1.26 million from the Old Mill property,” prosecutors said in the news release. “Cordell’s purchases during this time period included a private airplane, a Porsche, two [Chevrolet] Suburbans, two Mercedes Benz SUVs and other vehicles.”
The federal case was investigated by the FBI and prosecuted by assistant U.S. attorneys William G. Traynor and Stephen H. McClain.
In an earlier civil case tried in federal court in Rome, the property insurer who paid off the mortgage obtained a judgment against Cordell for more than $1 million, federal prosecutors said. Cordell also was indicted in August 2008 on state charges of arson, insurance fraud and loan fraud, prosecutors said. That case is pending in Bartow County Superior Court.
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