The attorneys of Pietragallo’s White Collar Criminal Defense practice group are experienced in all aspects of white collar criminal defense matters and investigations.
Former Pro Bowl wide receiver Irving Fryar was indicted Wednesday over an alleged mortgage scam, with New Jersey authorities claiming he conspired with his mother to steal more than $690,000 through fraudulently obtained home equity loans. Acting Attorney General John J. Hoffman says Fryar, who played for the New England Patriots and Philadelphia Eagles, and 72-year-old Allene McGhee agreed to take out five loans during a six-day period in December 2009, each time using her home in Willingboro as collateral. The pair did not disclose the other loans and provided false wage information for McGhee, according to the Attorney General. Fryar himself took $200,000 from that ill-gotten pool of money, authorities claim. The ex-football star allegedly used some of the money to pay off personal debts, while authorities are unclear where the rest went. Fryar and his mother now face second-degree charges of conspiracy and theft by deception in the case, which has been assigned to Burlington County court.
Fryar played for four NFL teams between 1984 and 2000, including the Miami Dolphins and Washington Redskins. He has remained involved in the sport, as the head coach of the Robbinsville High School varsity football team.
Susquehanna Bank, The Bank, Cornerstone Bank, Sun Bank and Beneficial Bank made the five loans and all thought they held first lien on McGhee’s property and that adequate equity backed up the lending, according to authorities. In the end, Fryar and his mother made just a handful of payments on four of the loans, authorities say. To mislead the banks, the pair falsely claimed that McGhee earned thousands of dollars monthly as an event coordinator for Fryar’s church, according to authorities. Authorities contend that Fryar and McGhee submitted false wage information for McGhee to secure two other mortgage loans: a $414,000 loan from Lincoln Mortgage Co. in 2009 that was secured by the McGhee-owned property where Fryar lives and a sixth mortgage loan on McGhee’s home from Roma Bank in 2010. The second-degree counts carry a possible sentence of five to 10 years in state prison and a fine of up to $150,000. The case is State of New Jersey v. McGhee et al. in the Superior Court of the State of New Jersey, County of Burlington. The case number was not immediately available.
A Minnesota federal judge sentenced the former president of hedge fund Arrowhead Capital Management LLC to 17.5 years in prison for wire fraud, securities fraud and lying to the U.S. Securities and Exchange Commission in Thomas Petters’ $3.7 billion Ponzi scheme, according to an order signed Friday. U.S. District Judge Richard H. Kyle sentenced James Nathan Fry for his role in the scheme, in which Fry intentionally misled investors while channeling $600 million in investor funds into Petters’ scheme and lying to investigators. Fry will serve 210 months for his conviction and pay $41 million in restitution. Fry will also serve his sentence in Minnesota and will participate in the court’s 500-hour residential drug abuse program, according to the order.
After a four-week trial, a federal jury found Fry guilty in June of all 12 counts against him — five counts of securities fraud, four counts of wire fraud and three counts of lying to SEC officials during their investigation of Arrowhead. Prosecutors asked Judge Kyle to sentence Fry to 25 years in prison. Fry’s attorneys argued that such a sentence was inconsistent with sentences the government sought for others involved in Petters’ scheme, including other alleged fundraisers for the fraud. Fry, Frank Ellroy Vennes and two other fundraisers accused of participating in Petters’ Ponzi scheme, David Harrold and Bruce Prevost, were all named as defendants in a 2011 criminal case against Petters’ alleged co-conspirators. Vennes, Harrold and Prevost pled guilty to their roles in the scheme.
Petters made tens of millions of dollars in commissions and management fees by funneling money into the Ponzi scheme, which purportedly used investor funds to purchase electronics for resale to big-box retailers. But his company, Petters Co. Inc., undertook no transactions, making payments solely from its own accounts, and the scam unraveled in 2008, the indictment said. Petters was sentenced in April 2010 to 50 years in prison for running the Ponzi scheme. The U.S. Supreme Court denied Petters’ request for a rehearing of his appeal in May 2012.
Vennes, a longtime associate of Petters who served as an intermediary between Petters and Fry, pled guilty in February to one count each of securities fraud and money laundering. Harrold and Prevost, who allegedly funneled $1 billion in clients’ money from a group of Palm Beach funds to Petters and collected $58 million in management fees, pled guilty in 2011 to four counts each of securities fraud.
The case is USA v. Frank Vennes et al., case number 0:11-cr-00141, in the U.S. District Court for the District of Minnesota.
The attorneys of Pietragallo’s White Collar Criminal Defense practice are experienced in every aspect of a white collar criminal defense matters and investigations.
