The exterior of Gulf Shores Plantation is seen on April 7, 2011. A federal judge in Mobile on Wednesday, June 27, 2012, sentenced Melissa Gulledge to 18 months in prison for her role in a real estate scheme involving condominium units she bought there in 2007. (Press-Register/John David Mercer)
MOBILE, Alabama ? A federal judge today sentenced an Atlanta-area woman to 18 months in prison and ordered her to pay more than $1.6 million to victims of a Baldwin County real estate scam that she helped her brother engineer.
Melissa Gulledge put her head in her hands and sobbed as Chief U.S. District Judge William Steele pronounced the sentence. Gulledge tearfully embraced her family afterward.
?I didn?t do anything wrong,? she said, surrounded by her 5 daughters and other relatives.
To the contrary, Steele said, a jury in December found that she had done plenty wrong. The panel convicted her of 15 counts, including conspiracy, making false loan applications, mail fraud and fire fraud. The judge questioned why Gulledge chose to take the case to trial rather than accept a plea bargain.
?When I heard the evidence in this case, I was quite frankly shocked,? he said. ?These are offenses that affect real people in real ways.?
Steele noted testimony from a septuagenarian who said she had purchased a Gulf Shores condominium as an investment that she could sell to finance her retirement. Instead, members of the conspiracy led by the defendant?s brother, Lance A. Collins, sucked the equity out of the property and left the seller with nothing when they defaulted on their loan.
Under a scheme that Melissa Gulldege participated in, she borrowed directly from the sellers of Gulf Shores condos in 2007 without informing commercial lenders that also had lent her money.
The arrangements allowed her to walk away with more money than she put down on each property.
?
Prosecutors said Gulledge reaped $546,470 from the sale of 4 Gulf Shores condos, sucked out all of the equity and left the sellers empty-handed when she and her partners stopped making payments and drove the properties into foreclosure.
It worked like this:
- 400 W. Plantation Road, Unit 4404. She borrowed $380,424, 115 percent of the condo?s $330,000 selling price. She walked away from the closing table with $119,757 in cash.
- 301 Peninsula Blvd. She borrowed $845,200, 112 percent of the condo?s $750,000 selling price. She walked away from the closing table with $161,567 in cash.
- 400 W. Plantation Road, Unit 3319. She borrowed $360,594, 120 percent of the condo?s $299,000 selling price. She walked away from the closing table with $141,700 in cash.
- 400 W. Plantation Road, Unit 4309. She borrowed $413,901, 120 percent of the condo?s $344,000 selling price. She walked away from the closing table with $123,446 in cash.
Now, Steele noted, the woman is working 2 jobs ? one unloading trucks and one climbing roofs to take measurements to determine insurance claims.
?There are no golden years for her,? he said.
Still, Steele rejected the recommendation of prosecutors, who called for nearly 4 years in prison. He said he did not believe the defendant played as large a role as other defendants, including Collins, who is serving a 5-year prison term.
Prosecutors put on evidence during the trial that Gulledge served as a ?straw purchaser? of 4 Gulf Shores condominiums in 2007. She signed documents stating that she would be responsible for the mortgage payments and down payments but that Collins secretly put up all the money.
Prosecutors also contended during the weeklong trial that Gulledge overstated her income and assets to obtain mortgage loans from First Educators Credit Union.
Gulledge did not disclose to the commercial lenders that she had worked out second mortgages in which she promised to make monthly payments directly to the sellers. The arrangement allowed her borrow more money than the condo units cost and actually walk away from the closing table with more money than she had put down. Assistant U.S. Attorney Deborah Griffin said that the defendant collected more than $546,000 in a span of 40 days in this way.
Collins and his partners bought dozens of properties using this method. When the beach real estate market was booming, they would quickly resell condos for a profit and everyone got paid. When the market collapsed, though, they found themselves unable to make mortgage payments. The lenders would foreclose on the properties and the sellers would be left with no money and property.
?This case was not a one-shot, quick thing. It was repeated over and over again,? Griffin told Steele. ?I think it?s telling that one of the victims at the trial turned to Ms. Gulledge and said, ?Why did you do this? You knew you couldn?t pay.??
Federal Defender Carlos Williams said his client trusted her brother and that both were trying to run a legitimate business.
?It is a fact? that some of these initial purchases were paid off and that they were putting profits back in the properties,? he said. ?What was the principal difference between the successful purchase and the ones that failed??
Williams also argued that his client would not receive adequate medical care in prison to treat her multiple sclerosis. He noted that Gulledge lost everything when the business went bust.
?Once this fell through, she was homeless,? he said.
Article source: http://blog.al.com/live/2012/06/atlanta-area_woman_sentenced_t.html
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