Michael Pinkney and Alan R. Price were each sentenced to 33 months in prison and ordered to pay $1,283,728.53 in restitution for their roles in a foreclosed real estate "flipping" scheme, U.S. Attorney Edward Stanton said.
According to facts revealed during their respective sentencing hearings before U.S. District Judge Samuel "Hardy" Mays, Jr., Pinkney, the owner and president of Capital Mortgage and Peanut Construction Company, and Price conspired to identify foreclosed properties, recruit nominee buyers to purchase and refinance the properties, and submit false and fraudulent documents to mortgage finance companies.
Using his position as a registered property appraiser, Price, of Olive Branch, Miss., would submit appraisals reflecting that improvements had been made to the foreclosed properties, knowing that they had not.
These appraisals falsely inflated the value of the properties, which allowed more money to be borrowed against them. These loans were obtained through Pinkney's mortgage company. As a result, the loan funding companies CitiMortgage and Taylor, Bean and Whitaker lost $1,283,728.53.
Pinkney is from Cordova, Tenn.
One example cited in the original information charging the men was a property on Harbert Avenue purchased by nominee buyers in January 2009 for $65,000. Two months later, Price submitted an appraisal which valued the property at $400,000 even though no improvements had been made to the property since its purchase. All of the properties listed in the information were located in the Midtown area of Memphis.
Both men pleaded guilty in mid-April to one count of conspiracy to commit wire fraud and one count of wire fraud.