Byrd Brothers Plead Guilty to Bank Fraud

Last year James and Eric Byrd admitted to defrauding seven banks by using false mortgage information and bad checks; they were sentenced Tuesday, April 3, in a multimillion-dollar bank fraud case.^[1] The banks lost between $2.5 million and $7 million dollars in the scheme, a third person whose identity remains unreleased has also been connected to the case. The Byrds have agreed to testify against the third person.^[2]

However the two men were not using all the money for their own personal bank accounts.^[3] They made several charitable contributions to the community, for example James Byrd started a scholarship fund to help kids go to college and at Christmas, gave thousands of dollars to families in need.^[4]

Prosecutors assert that the Byrds' crimes have are more harmful than beneficial.^[5] The men bought real estate and renovated or built new buildings; in the process they used several schemes to make their finances appear better so banks would lend them more money.^[6] "A lot of what they were doing is purchasing low-income housing and then selling it to one of their corporations or selling it to a family member two or three times and each time the price went up. And so the banks would then loan a number -- a value -- on a piece of property where the property was only worth a small amount -- a portion of that loan," according to Federal prosecutor Walt Wilkins.^[7]

The brothers were convicted of bank fraud and conspiracy to commit bank fraud, they were sentenced to five years plus three months in prison and ordered to pay more than $5.6 million in restitution.^[8] They have already paid back about $190,000.^[9]

We have previously discussed the federal crime of bank fraud here.

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^[1] Brothers Sentenced For Multimillion-Dollar Bank Fraud, WYFF4.com, Apr. 3, 2007, available at http://www.wyff4.com/news/11510802/detail.html (last visited Apr. 3, 2007).
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Brothers who admitted bank fraud ordered to repay $5.6M, Charleston Post & Courier, Apr. 04, 2007, available at http://www.charleston.net/assets/webPages/departmental/news/Stories.aspx?section=localnews&tableId=137403&pubDate=4/4/2007 (last visited Apr. 04, 2007)
^[7] WYFF4, supra note 1.
^[8] Id.
^[9] Id.