According to the recently filed federal information charging Gupton, he and his co-conspirators would falsify information in loan applications, such as down payment information, to create the appearance that the loan applicant had a lower debt-to-income ratio and could thus qualify for a loan. They would use various methods to make it appear as if the borrower had contributed a down payment. For instance, they would convey title, but not possession, of a mobile home to the loan applicant in order to create the appearance that the buyer was trading in another mobile home at the time of closing. The same mobile home was listed as a �trade-in� on the HUD-1�s for nine different borrowers and the notaries in each of the transactions was an employee of one of Gupton�s companies. In some cases, the conspirators would prepare a gift letter and provide it to a prospective buyer, asking the buyer to have a relative sign the letter and thereby falsely represent that the buyer was receiving a cash gift for use as a down payment. The conspirators would also provide cash to borrowers who would deposit the money in the bank and then return the money to the conspirators after the loan was approved. In other cases, the conspirators would make the down payment for the borrowers.
The information also alleges that the conspirators engaged in a fabricated invoice scheme to provide copies of original manufactured home invoices to a lender that required them. The information alleges that a conspirator/employee of a Gupton company created a template on a computer that could fabricate manufactured home invoices that resembled a Horton Home and/or Clayton Home invoices. The fabricated manufactured home invoices were inflated in order to maximize the loan amount a buyer could obtain. Land sales contracts were also created and used as a method of down payment to show mortgage companies that the buyers had a vested interest in the purchase. The land sales contracts falsely showed that the buyer was making payment to a Gupton company for a tract of land. Gupton did not own the land described in the contract as of the date of the contract and the buyers did not make the payments as reflected.
Between 1999 and 2003, the conspirators sold in excess of 150 manufactured homes that resulted in HUD backed mortgages exceeding $11,000,000.
