Attorney Sentenced in Mortgage Fraud Scheme

Mary Reagan, 41, of Alpharetta, has been sentenced to serve almost five years in federal prison for her role in a multi-million dollar mortgage fraud scheme. Reagan pleaded guilty in July 2008 shortly before she was to go to trial, and agreed to assist the government in the prosecution of the scheme.

Reagan was sentenced to four years, nine months in federal prison, to be followed by five years of supervised release. Reagan was also ordered to pay full restitution of over $4,000,000 and an exact amount will be determined by the court at a later date.

According to investigators and information presented in court: From mid-2004 through June 2006, Reagan was an attorney, doing business as The Reagan Law Group, closing millions of dollars of fraudulently inflated mortgage loans being provided to unqualified straw buyers. Reagan was the attorney responsible for representing the mortgage lenders at the closing table. When the loans closed, Reagan instead transferred millions of dollars of the inflated loan proceeds to her co-conspirators by falsifying closing documents, such as the HUD-1 settlement statements, and concealing from the lenders the true recipients and purposes of payments made in connection with the closing.

Reagan also reportedly concealed from the lenders that the unqualified straw buyers did not make sizeable down payments required by lenders as a condition of closing. On one property, Reagan reportedly falsified title work and other documents to conceal from a lender that the property was already encumbered by two mortgages at an inflated price, ensuring that the lender's security interest in the property was worthless.