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Ronald J. McCord, 24 Counts of Financial Fraud, Oklahoma 2024
OKLAHOMA CITY – Yesterday, a federal grand jury returned a 24-Count Indictment charging Ronald J. McCord, 69, of Oklahoma City, Oklahoma, with defrauding two locally-based banks, Fannie Mae, and others, announced Timothy J. Downing, United States Attorney for the Western District of Oklahoma.
The charges include bank fraud, money laundering, and making a false statement to a financial institution. McCord was the former President of First Mortgage Company, LLC (‘FMC’), an Oklahoma City-based mortgage lending and loan servicing company. The Indictment alleges a broad range of fraudulent conduct spanning approximately three years.
Mccord is charged in Counts 1 through 7 with defrauding Spirit Bank (‘Spirit’) and Citizens State Bank (‘Citizens’)—two state-chartered financial institutions—as well as their respective residential mortgage subsidiaries, American Southwest Mortgage Corporation (‘Mortgage Corp.’) and American Southwest Mortgage Funding Corporation (‘Funding Corp.). According to the Indictment, in approximately June 2016, an independent audit discovered that McCord had sold more than $14,100,000.00 in Spirit/Mortgage Corp. and Citizens/Funding Corp. loans ‘out of trust’ by failing to repay Spirit/Mortgage Corp. when certain Spirit/Mortgage Corp.-initiated loans were refinanced or otherwise paid off.
At the time of this discovery, FMC carried outstanding balances of about $200,000,000.00 and $140,000,000.00 on the Spirit/Mortgage Corp. and Citizens/Funding Corp. lines of credit, respectively. According to the Indictment, this discovery prompted further internal review. An internal audit revealed that McCord had misappropriated additional Spirit/Mortgage Corp. and Citizens/Funding Corp. loans by: (1) using FMC’s warehouse line of credit with (i.e., obtaining mortgage loans from) Spirit/Mortgage Corp. or Citizens/Funding Corp., selling those Spirit/Mortgage Corp. or Citizens/Funding Corp. loans to Fannie Mae, then resubmitting the loan documents to Spirit/Mortgage Corp. or Citizens/Funding Corp. to receive additional money from the Spirit/Mortgage Corp. or Citizens/Funding Corp. line of credit;
(2) using FMC’s warehouse line of credit with Spirit/Mortgage Corp. or Citizens/Funding Corp. to refinance the resulting loans without repaying Spirit/Mortgage Corp. or Citizens/Funding Corp. the originally loaned funds; (3) using FMC’s Spirit/Mortgage Corp. or Citizens/Funding Corp. line of credit to fund mortgages to borrowers, receiving payments from those borrowers, but never repaying Spirit/Mortgage Corp. or Citizens/Funding Corp.; (4) obtaining funds from Spirit/Mortgage Corp. or Citizens/Funding Corp. for loans that never closed, then failing to return the funds to Spirit/Mortgage Corp. or Citizens/Funding Corp.; and (5) using FMC’s warehouse lines of credit with Spirit/Mortgage Corp. and Citizens/Funding Corp. to ‘double fund’ loans by obtaining funds from both financial institutions to fund the same loans.
The Indictment alleges that McCord’s actions involved Spirit/Mortgage Corp. and Citizens/Funding Corp. loans that totaled approximately $40,000,000.00, in addition to the more than $14,100,000.00 in Spirit/Mortgage and Citizens/Funding Corp. loans that McCord had sold out of trust.
The Indictment further alleges that, upon learning of McCord’s conduct, Spirit/Mortgage Corp. and Citizens/Funding Corp. terminated future warehouse lending to FMC, and instituted new notification requirements that required McCord to assign FMC-funded mortgages to Spirit/Mortgage Corp. and Citizens/Funding Corp., to ensure that the title companies handling those mortgages sent payoffs directly to the banks. Though McCord filed the assignments as required, his employees contacted the title companies handling the mortgages and directed payments to FMC, not Spirit/Mortgage Corp. and Citizens/Funding Corp. McCord continued to collect loan payoffs without repaying Spirit/Mortgage Corp. and Citizens/Funding Corp. He then signed releases and other documents to Spirit/Mortgage Corp. and Citizens/Funding Corp. stating that FMC had returned the loan funds.
Key Facts
- State: Oklahoma
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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