A former Little Rock real-estate agent, Brandy Marie Thomas, was sentenced Tuesday to four years in prison and was ordered to pay $327,000 in restitution for her conviction last summer by a federal jury on four wire fraud charges stemming from housing loans she obtained by greatly overstating her income on loan applications.
The one-time owner of a North Little Rock-based realty company, Arnett & Co., received nearly $700,000 from different mortgage companies in 2006 as a result of the scheme, according to her 2011 indictment. She also was accused of pocketing a $48,956 insurance check that was made out to both her and a mortgage company to cover a house fire, although the fire damage was never repaired.
Thomas sold her company in 2005 and later worked as a real estate agent in Little Rock.
According to testimony at Thomas’ two-part sentencing hearing - with the first part occurring in late January and the second part on Tuesday - three of the properties purchased with the loans were eventually foreclosed on. They were at 1423 S. Summit St., 33 Glasgow Court and 1813 Princeton Drive. The fourth property - at 3709 W. 12th St. - couldn’t be foreclosed on because the mortgage company discovered, in trying to foreclose, that the house was burned and that Thomas had already collected insurance proceeds from the fire, a prosecutor told the judge. She said that if the mortgage company had gone ahead with the foreclosure, it would have had the expense of removing what was left of the house, which was more than it was worth at that point.
The amount of restitution that U.S. District Judge D. Price Marshall Jr. ordered Thomas to pay equalled the total amount of the unpaid balances after the houses were sold at foreclosure. The amount didn’t include additional amounts the mortgage companies sought for delinquent interest payments and other expenses incurred in selling the foreclosed properties.
At the sentencing hearing, FBI Agent Ward Seale also testified about Thomas’ involvement in another woman’s purchase of a house at 2610 S. Arch St. in 2008. Although Thomas wasn’t charged in that situation, the judge considered her actions involving that house as part of her overall “relevant conduct.”
In that case, prosecutors said, Thomas encouraged an older woman to misrepresent her income, which allowed the woman to obtain a $171,950 loan for the house. Thomas told the woman that was the purchase price, but in reality the seller had told Thomas he would accept $50,000 for it, Assistant U.S. Attorney Jana Harris said.
Seale testified that the sale netted a total commission of $108,000, of which Thomas personally received $77,878.
The buyer, however, couldn’t make the monthly payments, and the house was eventually foreclosed on, with the foreclosure sale netting just $22,000 in proceeds for the mortgage company, Freddie Mac, the Federal Home Loan Mortgage Corp. The company also received $2,184 from an escrow account, leaving it with an outstanding balance of $146,432. Seale testified that after collecting $56,123 of that through insurance, the mortgage company was left holding the bag for the remaining $55,976.
Thomas, the mother of two teens and a 5-year-old, also was sentenced to 18 months of probation after her release from federal prison, where parole isn’t available.
Arkansas, Pages 9 on 02/26/2014