Virginia Couple Get Prison Time For Running Foreclosure Rescue Ponzi Scheme Resulting In $9.7M In Losses

In Richmond, Virginia, the Richmond Times Dispatch reports:

• Darrell and Cynthia Underwood were sentenced to prison terms of 10 years and three years, respectively, [...] in a real estate investment scheme that caused $9.7 million in losses. The Chesterfield County couple were sentenced by U.S. District Judge James R. Spencer, who imposed the stiffest term called for under Darrell Underwood's plea agreement but two years less than the maximum his wife was facing. Each apologized yesterday for their conduct and to their victims, many of them fellow church members at the Mount Gilead Full Gospel International Ministries.

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• The Underwoods were owners of Walkwood Properties,(1) which specialized in helping homeowners about to lose their homes to foreclosure. The company solicited money from investors to help purchase homes. Many who invested were promised -- and received -- a 50 percent return on their money within 60 to 90 days. But the Underwoods were running a Ponzi scheme in which money from new investors was used to pay earlier ones. [...] Of $18 million the couple brought in from investors in just eight months, only $2.1 million was used in any housing transactions.

For more, see Chesterfield couple sentenced in fraud scheme.

For the U.S. Attorney (Richmond, VA) press release, see Chesterfield Husband and Wife Sentenced in Multi-Million Dollar Fraud Scheme.

(1) According to the U.S. Attorney's Office, Walkwood Properties is connected to another case styled United States v. Colin C. Connelly, Case No. 3:08CR466. In connection with a guilty plea entered on December 2, 2008, Connelly admitted to conspiring with representatives from Walkwood Properties to skim equity in housing transactions by making false entries on HUD-1 Settlement Statements. On March 10, 2009, Judge Spencer sentenced Connelly to 24 months imprisonment and ordered him to pay $376,464.62 in restitution.