Get Connected
  • facebook
  • twitter
Print

Utah man gets 57 months in fraud scheme

CHARLESTON, W.Va. -- A Utah man who facilitated a complicated mortgage "flipping" scheme that officials say wreaked financial havoc on homes in Putnam County's Stonegate subdivision will spend more than four years in federal prison.

U.S. District Judge Thomas E. Johnston sentenced Raymond Morris to 57 months in prison Monday on charges of conspiracy to commit wire fraud and bank fraud, marking the end of a six-year investigation that involved several conspirators in Utah and West Virginia.

"You damaged an entire neighborhood here in West Virginia," Johnston said. "It was a clever scheme, a sophisticated scheme. It was appalling in it's audacity, actually."

In the early- and mid-2000s, Morris headed a Utah group made up of rookie investors that sought out potentially lucrative real estate markets across the country, prosecutors said.

Putnam County brokers Deborah and Todd Joyce conscripted appraisers James Thornton and Mark Greenlee to pin drastically inflated values on homes in the Stonegate subdivision in Hurricane. Morris sold those homes off to his investors, promising that they would sell at an even higher price.

Michael Hurd, another Utah man, used a front program he created to conceal payment sources and rip off loan proceeds.

In order to sell the homes to members of his group, Morris handed out spreadsheets that showed more and more of the properties were being bought out, creating an appearance of scarcity that convinced the unwitting investors to "act irrationally and purchase a property thousands of miles away, sight unseen," assistant U.S. Prosecutor Thomas C. Ryan said in a sentencing memorandum.

Morris also told the members that he himself bought one of the most expensive homes in Stonegate.

Morris' attorney, John Carr, said that his client did not have a financial background or knowledge of the real estate industry and was only a member of the investor group, which was actually led by Chad Haber, according to court filings.

Morris helped match investors to properties in West Virginia and got paid a fee for each match, Carr said, according to filings.

Carr said during Monday's sentencing that Morris was the ninth of 10 children, and grew up in government-subsidized housing in a California farming community. He eventually became interested in real estate and attended seminars, making moderate strides before becoming entangled in illegal activity.

"As is often the case," Carr said, "his fall was much further and faster than his ascent."

U.S. Attorney Booth Goodwin said during a news conference after Monday's sentencing that the scheme cost West Virginia lenders alone at least $2 million, but said he could not place a number on the losses homeowners in the Stonegate subdivision suffered.

Ryan said that because of the fraud scheme, appraisers and lenders steer clear of the neighborhood.

"The worst part is the collateral damage," Ryan said. "It's the person who lives next door."

Morris pleaded guilty to the charges in the West Virginia case earlier this year. The plea agreement was linked to a second string of charges he admitted to in Utah, where he was accused of operating a $60 million Ponzi scheme that also involved members of his real estate group.

Morris will be sentenced on those charges later this week. Prosecutors have agreed to recommend that his prison term in that case run at the same time as his sentence on the West Virginia charges.

For their roles in the scheme, Todd Joyce and Mark Greenlee each received 18 months in prison. Michael Hurd received 26 months and Deborah Joyce received 46 months.

James Thornton, who prosecutors have said helped the investigation the most, received 18 months of probation.

Reach Zac Taylor at Zachary.Taylor@wvgazette.com or 304-348-5189.


Print

User Comments