OKLAHOMA CITY – A former mortgage company executive is fighting a 24-count federal indictment that charges him with defrauding two banks, the Federal National Mortgage Assn. (“Fannie Mae”), and others, in an elaborate scheme.
Ronald J. McCord, 70, of Oklahoma City, most recently was granted an extension, until April 8, to respond to the prosecution’s pretrial motions. He was indicted by a grand jury empaneled in the Western District federal court in Oklahoma City.
McCord formerly was the president of First Mortgage Company, LLC (“FMC”), an Oklahoma City-based mortgage lending and loan servicing company. The indictment alleges a broad range of fraudulent conduct – including bank fraud, money laundering, and making a false statement to a financial institution – spanning approximately three years,
McCord is charged in counts 1 through 7 with defrauding Spirit Bank (“Spirit”) and Citizens State Bank (“Citizens”) – two state-chartered financial institutions – as well as their respective residential mortgage subsidiaries, American Southwest Mortgage Corporation (“Mortgage Corp.”) and American Southwest Mortgage Funding Corporation (“Funding Corp.”).
The indictment alleges that McCord’s actions involved Spirit/Mortgage Corp. and Citizens/Funding Corp. loans that totaled approximately $40 million, in addition to the more than $14.1 million in Spirit/Mortgage and Citizens/Funding Corp. loans that McCord sold “out of trust” by failing to repay Spirit/Mortgage Corp. when certain Spirit/Mortgage Corp. initiated loans were refinanced or otherwise paid off. At the time of this discovery, FMC carried outstanding balances of about $200 million and $140 million on the Spirit/Mortgage Corp. and Citizens/Funding Corp. lines of credit, respectively.
The indictment further alleges that, upon learning of McCord’s conduct, Spirit/ Mortgage Corp. and Citizens/ Funding Corp. terminated future warehouse lending to FMC and instituted new notification requirements.
Count 8 of the indictment alleges Spirit/Mortgage Corp. and Citizens/Funding Corp.’s refusal to fund new FMC mortgages prompted McCord to seek out a new warehouse lender.
In early 2017, McCord began negotiating with CapLOC, LLC, a North Carolina-based mortgage lending business, and offered to sell FMC’s mortgage lending business in exchange for quick funding from CapLOC. In the course of those negotiations, McCord made false statements and representations to obtain CapLOC funds. McCord then used the money to repay Spirit/ Mortgage Corp. part of his outstanding $40 million debt.
Finally, the indictment alleges that in 2017, FMC serviced approximately 12,000 loans worth a total of approximately $1.8 billion for Fannie Mae.
Counts 9-24 of the indictment allege McCord defraud- ed Fannie Mae by diverting escrow monies intended to pay homeowners’ taxes, insurance, principal and interest, to cover FMC’s operating expenses. As a result, McCord bounced checks to more than 60 taxing authorities, and borrowers throughout the Oklahoma City area and elsewhere missed making their tax payments.
The indictment further alleges McCord laundered the stolen escrow monies by using the funds to write himself checks, pay more than half the purchase price of his son’s $900,000 Oklahoma City home, and build a custom vacation home in Colorado.
With regard to the bank fraud and false statement to a financial institution charges in the indictment, McCord faces up to 30 years in prison and a fine of up to $1 million on each count. He also faces up to 10 years in prison and a $250,000 fine on to each of the money laundering counts. Furthermore, the indictment seeks forfeiture from McCord in the amount of the proceeds of the allegedly fraudulent schemes and in the amount of the property involved in the offenses.
The case is the result of an investigation by the Federal Housing Finance Agency Office of the Inspector General, Federal Deposit Insurance Corporation Office of Inspector General, and the Federal Bureau of Investigation Oklahoma City Field Office. It is being prosecuted by Assistant U.S. Attorney Julia E. Barry.