On September 1, 2011, four Tucson area individuals William Michael Naponelli, Bryan Atwood, Walter Scott Fruit, and Sandra Jackson were indicted for their roles in a mortgage fraud case. As of this week, all four have pleaded guilty to their roles in the mortgage fraud scheme.
• William Michael Naponelli – pleaded guilty to conspiracy to commit bank fraud and conspiracy to commit money laundering on 12-20-12, sentencing set for 5-28-2013
• Bryan Atwood – pleaded guilty to conspiracy to commit wire fraud on 2-25-13, sentencing set for 5-6-2013
• Walter Scott Fruit – pleaded guilty to conspiracy to commit bank fraud and conspiracy to commit transactional money laundering on 2-28-13, sentencing set for 5-9-2013
• Sandra Jackson – pleaded guilty to conspiracy to commit wire fraud on 2-27-13, sentencing set for 5-9-2013
The crew fraudulently obtained loans for nineteen properties totaling approximately $5.85 million between the years 2006 through 2007. Naponelli and Fruit purchased properties using various business entities with which they were associated. Naponelli and Fruit sold these properties to straw buyers for a profit.
They submitted to lenders loan applications and other documents that contained material false representations relating to the purchase of the nineteen properties. After the fraudulently obtained loan proceeds were received portions of the loan proceeds were diverted into bank accounts under the control of some of the co-conspirators.
As a result of the mortgage fraud scheme, each of the properties went into foreclosure.
The investigation was conducted by the Internal Revenue Service – Criminal Investigations and the Federal Bureau of Investigation.