Con man scams over 100 people, gets 25 years in prison

Edward William Farley, 47, pleaded guilty on Nov. 5 to a variety of charges, including bank fraud, bankruptcy fraud and conspiracy involving mortgage fraud, the U.S. Attorneys Office for the Northern District of Georgia. He also pleaded to a check-kiting scheme involving $1.2 million he obtained from Washington Mutual Bank, prosecutors said.

On Tuesday, U.S. District Judge Timothy C. Batten Sr., sentenced him to 25 years in prison and five years of supervised release thereafter. Farley also was ordered to pay $24 million in restitution, though prosecutors acknowledge that many of his victims will get nothing. All of his assets that could be located already were seized.

"The defendant's just punishment is all most of his victims will have, since well over $20 million in restitution remains unpaid," says a government brief filed for his sentencing hearing. The brief says Farley could benefit from training "in a legitimate trade or profession" while in prison since he has only a high school diploma.

Despite his lack of a higher education, he executed numerous complex schemes that in one case duped even a major bank. He pleaded guilty to writing checks against insufficient funds at  Washington Mutual Bank totaling $1.2 million, according to U.S. Attorney Sally Quillian Yates, whose office prosecuted the case.

Farley, who is from Hoschton, a tiny town near Lake Lanier, started with a classic mortgage "flipping" scheme that he conducted for two years beginning in 1999, according to court records. He acquired properties then found straw buyers to purchase them at inflated prices. Then, aided by fake appraisals, he got loans to buy back the properties at even higher prices, pocketing the difference, according to the government brief, which notes that over a dozen neighborhoods in metro Atlanta experienced inflated property values and artificially high property taxes as a result.

Though he suspected investigators were onto him, he launched the Ponzi scheme in 2004. During the next three years, he lured over 100 investors with promises of interest payments as high as 60 percent for a business that was allegedly buying and renovating homes for resale, prosecutors said.

According to the government sentencing brief, Farley's victims included the aged and ill. One man with stomach cancer who was worried about his wife's financial security lost $345,000, leaving her with nothing. A 71-year-old woman whose husband had heart problems was confronted with paying the mortgage on their home, so she took a $10 an hour job but still couldn't swing the payments.

The court brief gave insight into Farley's tactics: it says he pressured one young couple to sign paperwork committing their money while the wife was in labor at a hospital.

His victims suffered home foreclosures, utility disconnections and divorce and even considered suicide, prosecutors said.

Farley had help.

Walter Julius Hermann, 41, of Dunwoody pleaded guilty to his role in the scam on Dec. 16, and was sentenced Tuesday to 33 months in prison. The appraiser admitted falsely inflating property values for Farley.

And Cumming real estate closing attorney Trent Edward Wright, 38,  pleaded guilty on Dec. 17 to mail fraud. Prosecutors say he issued title policies without paying off prior security holders, resulting in millions of dollars in losses to title insurers.

Wright pleaded guilty to mail fraud on Dec. 17, and was sentenced on March 12 to 21 months in prison.