July 16, 2016
A Delaware County man is accused of orchestrating a massive mortgage scheme, allegedly stealing millions and using the money to finance a luxurious lifestyle.
The U.S. Attorney's Office for the Eastern District of Pennsylvania unsealed an indictment Friday, revealing charges against George Barnard, 45, of Newtown Square, for allegedly defrauding banks and borrowers over the course of eight years.
According to authorities, Barnard was one of two owners of Capital Financial Mortgage Corporation, a company based in Delaware County, from 2005 to March 2013.
During that time, Barnard took nearly $13 million from banks with the stated purpose of funding mortgage loans for borrowers and paying off the borrowers’ existing mortgage, according to the indictment.
Instead, Barnard used that money for a suite at the Wells Fargo Center, luxury cars, multi-million-dollar beach homes, a yacht and the salary of a yacht captain, federal prosecutors allege.
Barnard allegedly bought three beach homes in Avalon and a home in Islamorada, Florida.
In order to keep having a large pool of money to dip into, Barnard would sell the mortgages his company had written to other banks and tell the lenders they were first mortgages when they were really worthless second mortgages, according to the indictment.
Barnard is also accused of filing false tax returns and keeping the scheme going by falsifying documents through title companies he also owned.
The indictment alleges that lenders suffered losses of $12,700,700 because of Barnard's scheme and borrowers were stuck with second mortgages on their homes after CFMC failed to pay off their first mortgages.
He has been charged with 24 counts of wire fraud, four counts of bank fraud and three counts of filing a false tax return.
Barnard faces a potential maximum sentence of 669 years in prison, a $12,300,000 fine and related penalties.