Title: FBI — Charlotte Attorney Victoria Sprouse Convicted by Federal Jury
Headings: Charlotte Attorney Victoria Sprouse Convicted by Federal Jury
Jury Convinced Regarding Attorney’s Role in Mortgage Fraud Schemes

Charlotte Attorney Victoria Sprouse Convicted by Federal Jury
Jury Convinced Regarding Attorney’s Role in Mortgage Fraud Schemes
Content: Sprouse and mortgage broker Michael D. Pahutski were originally charged in this case in connection with a scheme involving real estate investor Stephen Hawfield, in which approximately 210 houses were purchased in a “flip scheme” through fraudulent mortgage applications to nBank for more than $15 million. In a second superseding indictment, filed in March 2008 and adding four additional defendants, Sprouse is alleged to have performed legal work in connection with purchases in additional and different mortgage fraud schemes. According to evidence presented at trial, Sprouse, working with a local real estate investor and several builders, perpetrated a mortgage fraud scheme in 2000/2001 in which builders supplied purported “decorator allowances” to investors, who used the disbursements to fund the down payments for house purchases. Sprouse facilitated this scheme, according to trial testimony and evidence, by failing to deposit the investor’s down payment checks into her law firm’s trust account until after the supposed “decorator disbursement” checks were issued and deposited into the investor’s checking account from which the down payment checks had been written. Further according to trial evidence and testimony, from 2002 through 2004 Sprouse, working with co—conspirators who served as realtors, a mortgage broker, and a local home builder, perpetrated another mortgage fraud scheme in which mortgage loan applications were falsified by the mortgage broker for investors purchasing multiple properties but stating that each was their “primary residence.” The home builder agreed to kickback a portion of the supposed purchase price of the house to the buyer through payments funneled through the realtors. Sprouse performed legal work in connection with these closings, trial evidence revealed. Acting U.S. Attorney Edward Ryan, along with his Assistants, Matthew T. Martens and Kurt W. Meyers, who prosecuted the case at trial, highly commended the FBI, US Postal Inspection Service, IRS—CI, and NC Insurance Commission for their leadership and initiative in this complicated investigation, which included detailed paper trails and false insurance documents. Following Wednesday’s conviction, U.S. District Judge Martin Reidinger announced that sentencing of Victoria L. Sprouse would take place on a later date. Sprouse was allowed by Judge Reidinger to go free in lieu of a $100,000 bond pending sentencing.