A 70-year-old Sarasota man was sentenced to five years in federal prison for his role in a sophisticated mortgage fraud scheme.
Arthur R. Seaborne pleaded guilty Nov. 6 to conspiring to commit bank fraud, U.S. Attorney Robert E. O'Neill said.
As part of his sentence, Seaborne must forfeit more than $4.2 million in proceeds from the offense. The matter of restitution will be addressed at a later date, O'Neill said.
From 2003 to 2008, Seaborne and others used several corporate entities to perpetuate the fraud scheme, including Southeast Capital Advisors LLC, according to documents and testimony presented in court.
Through Southeast Capital Advisors, Seaborne marketed a "no money down" residential purchase program that made loans to clients, so the clients could make down payments on residential properties.
Seaborne and his co-conspirators would then prepare and submit mortgage loan applications to lenders for these clients.
The applications were fraudulent in that they omitted the fact that the clients' down payments had been loaned to them, O'Neill said in a news release. The applications usually overstated the clients' assets and understated their liabilities.
Some loan applications misrepresented that the clients intended to make the properties their primary residences, when they actually were investment properties, the U.S. Attorney said.
Over the course of the fraud scheme, some of the loans on the residential properties went into default, O'Neill said.
The lenders lost about $4 million in the deals, O'Neill said.