Gary Hughes, Mortgage Fraud, Florida 2005

Tampa, Florida – In a shocking turn of events, 36-year-old Gary Hughes, a resident of San Diego, California, has pleaded guilty to one count of mortgage fraud conspiracy involving bank fraud. Hughes faces a maximum penalty of 30 years’ imprisonment for his role in the high-stakes crime.

According to court proceedings, in 2005, entities controlled by co-conspirators entered into a contract to purchase The Arbors, an apartment complex in Hillsborough County, Florida. The new owners of The Arbors then engaged in a plan to convert the complex from rental to condominium units, a move that would ultimately lead to the downfall of Hughes and his co-conspirators.

Hughes and his co-conspirator, Brendan Bolger, aided the developers in the sale of numerous condominium units at The Arbors through his company, Capital Management Guarantee, LLC. In order to induce buyers to purchase units, Bolger created an addendum to the purchase contract that offered buyers various incentives, such as rental supplements, money to defray maintenance costs, and a design credit to upgrade the unit’s amenities.

When the buyers cancelled the design credit within 10 days of signing the addendum, Bolger paid a kickback for the amount of the design credit to the buyer from Capital Management’s bank account. In this manner, Bolger and other co-conspirators failed to disclose to buyers’ mortgage lenders material facts about the financing of the sale of The Arbors condominiums. Bolger and others referred prospective buyers to Hughes in order to obtain financing for their unit purchases.

Specifically, Hughes’s role in the conspiracy as a mortgage broker consisted of originating mortgages for units through Envision Lending and Set 2 Go Loans. The loan applications Hughes submitted contained material misrepresentations, including false occupancy and inflated borrower income and asset information. These loan applications were submitted to FDIC insured institutions and other mortgage lenders. Additionally, through his company, HUMAR Investments, Hughes and a co-conspirator provided the borrowers cash to close loans without disclosing the payments to the lenders.

This case was investigated by the Federal Bureau of Investigation and the Federal Housing Finance Agency, Office of Inspector General. It is being prosecuted by Special Assistant United States Attorney Chris Poor and Assistant United States Attorney Jay Hoffer. United States Attorney A. Lee Bentley, III announces that Gary Hughes pleaded guilty to one count of mortgage fraud conspiracy involving bank fraud.

Related Federal Cases