Bankruptcy Fraud Case

As charged in the Indictment, Garnett fraudulently obtained twelve (12) mortgage loans totaling almost $6 million, using luxury properties in which he lived as collateral. To obtain the mortgage loans, Garnett submitted loan applications containing false financial information in his name and in the names of certain nominees. The false financial information included overstated income, overvalued assets, false employment information, and false tax information. Garnett and Akey also arranged for the nominees to become signatories on Akey’s accounts, so that the nominees would appear to have assets sufficient to qualify for the loans for which they were applying. Through this scheme, Garnett received more than $1.4 million from these loans, much of which was shared with his longtime friend, Akey. Akey also concealed the monies for Garnett and laundered the money through her bank accounts.

According to the Indictment, Garnett filed for bankruptcy in 2002 and fraudulently concealed his interest in certain properties located in Delray Beach, Florida, from the Bankruptcy Court, creditors, and the United States Trustee. Garnett also failed to disclose a $272,000 unrecorded Mortgage Note related to the properties in the same bankruptcy, and again when he filed for bankruptcy in April, 2005.

Garnett, who has been incarcerated since his arrest on September 13, 2005, was sentenced to sixty (60) months’ imprisonment, to be followed by three (3) years’ of supervised release, which was the statutory maximum sentence on the count of conviction. In addition, he was ordered to pay restitution in the amount of $1,004,403.22. Akey, who cooperated with the government’s investigation, was sentenced to one year and one day imprisonment, three (3) years of supervised release, and restitution in the amount of $1,004,403.22.