Former
East Grand Rapids Businessman Kevin Grady, Sr. Sentenced to 14 Years’
Imprisonment
GRAND RAPIDS, MI—The last two
participants in a multi-million-dollar mortgage loan fraud scheme were
sentenced in U.S. District Court today, announced U.S. Attorney Donald A.
Davis. Kevin Grady, Sr., 48, of Grand Rapids, Michigan, was sentenced by the Hon.
Robert J. Jonker to serve 14 years in prison for his convictions for wire
fraud, bank fraud, and making false statements to the FBI. Edward Hessie
Sumrell, 55, of Grand Rapids, Michigan, was sentenced to serve three years’
probation for making a false statement to the FBI. Seven other individuals,
including a convicted licensed appraiser and a convicted closing agent,
testified for the government at the trial of Grady and Sumrell in February of
this year. Both were previously sentenced for their roles in conjunction with
the same mortgage fraud scheme.
During 2005 and 2006, Grady managed the
Grand Rapids office of Sure Financial, a mortgage brokerage business owned and
licensed by another individual. The government proved at trial that Grady, and
loan officers working at his direction, obtained inflated appraisals and fixed
prices with sellers. Grady enticed financially unqualified buyers to purchase
the homes by promising them kickbacks of $5,000 to $10,000 per property after
the closings. Grady defrauded the mortgage lenders by submitting loan
applications that misrepresented the buyers’ places of employment, employment
income, assets, and other pertinent information. Grady and his loan officers
created or obtained false paystubs, residential leases, tax documents,
verifications of employment, and other documentation that was submitted to the
lenders to make it appear that the information on the loan applications was
truthful. Some of these counterfeit documents were prepared and provided by
Sumrell, who was convicted by the jury of lying to the Federal Bureau of
Investigation regarding his association with Grady’s office. Judge Jonker
stated that Grady’s significant sentence was attributable not only to his
blatant and pervasive pattern of fraud, but also to his abusive behavior
directed at individuals that he needed to carry out the fraud and who were
vulnerable to his intimidation.
Evidence submitted at trial proved that,
in less than one year, Grady defrauded mortgage lenders in excess of two
million dollars and personally pocketed over $500,000 of the fraudulently
obtained loan proceeds, some of which was then used to pay kickbacks to the
buyers. Grady also defrauded Key Bank in conjunction with a million-dollar loan
that he used to pay off the building on East Paris Avenue where he operated the
fraudulent mortgage loan business and Grady Group Properties. Judge Jonker
ordered Grady to pay $3,000,000 in restitution to the lending institutions, and
he agreed to forfeiture in the amount of $1,181,332. “Mortgage fraud will
continue to be vigorously investigated and prosecuted by this office. Pervasive
mortgage fraud schemes do not just victimize the mortgage lenders, they
victimize our entire community by manipulating the true value of real estate
through falsely inflated appraisals, followed by inevitable foreclosure sales
at below-market values,” said U.S. Attorney Davis.
The Grand Rapids Resident Agency of the
FBI investigated the case.
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