Ronald J. McCord, the former president of First Mortgage Company of Oklahoma City, was indicted by a federal grand jury for bank fraud and money laundering as part of a scheme to defraud banks and pay for lavish homes for himself and his family, prosecutors announced.
McCord, 69, of Oklahoma City, allegedly defrauded two Oklahoma banks, Fannie Mae and others over a three-year period, said Timothy J. Downing, U.S. Attorney for the Western District of Oklahoma.
According to the 24-count indictment, McCord defrauded Spirit Bank and Citizens State Bank – as well as their mortgage subsidiaries American Southwest Mortgage Corporation and American Southwest Mortgage Funding Corporation – by selling $14.1 million in mortgage loans and failing to repay the banks when they were refinanced or otherwise paid off. At the time of the discovery, McCord’s bank carried lines of credit of $200 million with Spirit and $140 million with Citizens.
A subsequent internal audit discovered that McCord further misappropriated Spirit and Citizens loans by using FMC’s line of credit to obtain mortgage loans from Citizens and Spirit, selling them to Fannie Mae and then resubmitting the loan documents to Citizens and Spirit to receive additional money from the banks.
McCord allegedly used FMC’s line of credit to refinance the resulting loans without repaying Spirit and Citizens the originally loaned funds. He used money from the banks to fund mortgages to borrowers and receive payments from borrowers – but never paid back the banks – while also obtaining funds from the banks for loans that never closed and failing to repay them, prosecutors said.
McCord also allegedly used FMC’s lines of credit for Spirit and Citizens to “double fund” loans by obtaining money from both banks to fund the same loan.
The indictment alleges that McCord’s actions cost Spirit and Citizens $40 million, in addition to the $14.1 million in loans that McCord sold out of trust.
Upon learning of McCord’s alleged conduct, Spirit and Citizens terminated warehouse lending to FMC and required title companies handling the affected mortgages send payoffs directly to the banks – though McCord’s employees contacted the title companies and directed payments to FMC and continued to collect payoffs without repaying the banks.
The indictment also alleges that McCord defrauded Fannie Mae by diverting escrow money intended to pay homeowners’ taxes, insurance, principal and interest to instead pay FMC’s operating expenses. As a result, McCord bounced checks to more than 60 taxing authorities – and borrowers missed making tax payments.
The indictment further alleges that McCord laundered the stolen escrow monies by using the funds to write himself checks, pay more than half the purchase price of his son’s $900,000.00 Oklahoma City home, and build a custom vacation home in Colorado.
McCord is listed as the Oklahoma ambassador for the Mortgage Bankers Association.
McCord faces up to 30 years in prison and a fine of up to $1 million on each count for the bank fraud and making a false statement to financial institution charges.. He also faces up to 10 years in prison and a $250,000 fine on to each of the money laundering counts. The indictment also seeks forfeiture from McCord in the amount of the proceeds of the fraudulent schemes and in the amount of the property involved in the offenses.