A Forsyth County man who kept a law practice in Sugar Hill will spend nearly two years behind bars on a federal mail fraud conviction.
Trent Edward Wright, 38, was sentenced Friday to one year and nine months in federal prison by U.S. District Judge Timothy C. Batten Sr.
Wright also will spend three years on probation following his release and must pay more than $2.4 million in restitution.
He pleaded guilty in December to the charge, which the U.S. Attorney’s office said involved a mortgage fraud scheme.
U.S. Attorney Sally Quillian Yates said in a statement that lenders and title companies relied on Wright as their closing attorney and agent.
“He was supposed to pay off all prior encumbrances on properties to secure loans and pass clear title as warranted by the title insurance,” she said. “He didn’t. Now he is going to federal prison.”
According to the statement, information presented in court showed Wright closed about 17 loans during fall 2006 “in which lenders were falsely assured that all prior loans encumbering the properties securing their loans had been paid off.”
As a result, the lenders thought they would be in the first position to recoup their loan amounts from the sale of the properties if they went into foreclosure, the statement shows.
In addition, Wright reportedly wrote title insurance for the loans, though he failed to pay off several prior recorded liens encumbering the properties.
According to the statement, “Rather than ordering title searches and requesting payoff amounts from all prior lenders as required before the new loan closings, Wright either failed to order title searches or disregarded recorded prior encumbrances, causing over $2.4 million in losses.”
Wright closed his Sugar Hill law practice in 2007. In December, he surrendered his license to practice law.
It appears Wright didn’t operate alone.
Edward William Farley, 47, of Hoschton is identified in the statement as a co-conspirator in a related case.
Farley pleaded guilty in November to bank fraud and conspiracy. His sentencing is scheduled for April 14 in front of Batten.
He faces a maximum of 30 years in prison and a fine of up to $1 million plus full restitution.
According to the statement from the U.S. Attorney’s office, Farley operated as the borrower through a company called Alliance Resource Management.
He then received the proceeds from the 17 loans Wright closed.
The statement goes on to say that Farley, in seeking funds for other loans, told real estate investors, lenders and banks they would get returns of 14 percent to 60 percent. He also promised them they would be first to recoup loan amounts from the sale of properties if they went into foreclosure.
“Farley in fact used the same property to falsely ‘full secure’ multiple lenders on that same property,” the statement shows, adding that the fraud caused more than $25 million in losses.