An Arizona man was sentenced Tuesday to two years in federal prison for taking part in a real estate fraud scheme in which developers borrowed to build townhomes at Table Rock Lake, acting U.S. Attorney Tom Beall said today. In addition, he was ordered to pay more than $14.2 million in restitution.
James B. Clarkson, 45, Casa Grande, Ariz., pleaded guilty in U.S. District Court in Kansas City, Kan., to one count of conspiracy to commit bank fraud.
In his plea, he admitted that while he was working as a mortgage broker he entered into an agreement with co-defendants David Drake and Donald Snider to advertise and obtain investors for their Indian Ridge Project. Drake and Snider planned to construct townhomes near Table Rock Lake and sell them as vacation homes.
Clarkson prepared loan applications for buyers in which he made false statements. He inflated borrowers’ income to make sure they qualified for loans.
Drake and Snider obtained 51 construction loans for their project. The loan agreements required construction costs be paid before seeking reimbursement. Instead, Drake and Snider failed to do enough construction to justify the funding they received. Only 13 homes were started and none of them were completed. Drake and Snider used the money from the loans for personal expenses and expenses related to other construction projects.
Drake and Snider are awaiting sentencing.
Beall commended the Federal Deposit Insurance Corporation, the Internal Revenue Service, the U.S. Secret Service and Assistant U.S. Attorney Chris Oakley for their work on the case.