Sarasota Man Sentenced to Federal Prison for Mortgage Fraud
A Sarasota man was sentenced to five years in federal prison this month for his role in a complicated mortgage fraud scheme. Arthur R. Seaborne had previously pleaded guilty to conspiring to commit bank fraud. In addition to the prison sentence, Seaborne was ordered to forfeit $4,269,886.55 in proceeds from the offense.
According to court documents and information presented in court, prosecutors allege that Seaborne and others conspired to commit bank fraud from as early as March 2003 through July 2008. Throughout that time, they say, Seaborne used several corporate entities to perpetuate the fraud scheme, including Southeast Capital Advisors, LLC. Through Southeast Capital Advisors, Seaborne marketed a “no money down” residential purchase program. The program operated by making loans to Seaborne’s clients, so that those clients could make down payments in connection with their purchases of residential properties.
After the down payments were loaned to the clients, Seaborne and his co-conspirators prepared and submitted mortgage loan applications to lenders for these same clients. The applications, however, omitted information regarding the fact that the clients’ down payments had been loaned to them. Such information is a required disclosure on mortgage loan applications.
The applications also usually overstated the clients’ assets and understated their liabilities. Some loan applications also included the fraudulent misrepresentation that the clients intended to make the properties their primary residences, when in fact they were investment properties – another fact that is a required mortgage application disclosure. Over the course of the fraud scheme, some of the loans on the residential properties went into default. The government asserts that the total loss amount has not yet been definitively determined. They estimate the losses incurred by the lenders at this time at approximately $4 million.
Seaborne may yet be ordered to pay restitution as well as serve his prison sentence. That matters appears to be delayed while the government make a final determination as to the amount of the lenders’ losses.