Former Georgia Attorney Sentenced to Prison for Multi-Million Dollar Real Estate Ponzi Scheme

STEVEN H. BALLARD, 53, of McDonough, Georgia, was sentenced November 5 by United States District Judge Thomas W. Thrash, Jr. to serve over five years in federal prison on a wire fraud charge involving a real estate investment scam that lasted over five years and defrauded a dozen victims in Georgia, Florida and Tennessee.

Clayton County District Attorney Tracy Graham Lawson said, “I am gratified that the U.S. Attorney’s Office was able to present the losses of so many victims to the Court, and thereby obtain justice for those who relied on this former attorney and his ‘legal’ papers. In Clayton County alone, our victims lost over $200,000, but there were more victims spread well beyond our county limits which were included in this federal prosecution.”

BALLARD was sentenced to five years, three months in prison to be followed by three years supervised release, and ordered to pay approximately $1.13 million in restitution to scheme victims. There is no parole in the federal system. BALLARD pleaded guilty to the charge on July 9, 2009.

According to Acting United States Attorney Yates and the information presented in court: From September 2002 through May 2006, BALLARD, a former McDonough-based real estate and business law attorney, operated a fraudulent real estate investment scam, commonly known as a “Ponzi” scheme. During the time of scheme he collected over $2 million from investors in Georgia, Florida, and Tennessee. In Georgia alone, he solicited funds from victims in Duluth, Dunwoody, Fayetteville, Jackson, Jonesboro, Newnan, Palmetto, Peachtree City, and Whitesburg. BALLARD falsely promised “lucrative” real estate and other investments which never took place, often preparing HUD-1 Settlement Statements, Warranty Deeds and Sales Contracts to reflect non-existent property purchases while using a portion of the scheme proceeds to repay former victim-investors and clients whose cases he had mishandled. BALLARD made reimbursements to victims only if they detected the scheme. All repayments were funded with money from new victim-investors.

BALLARD’s law license was suspended by the State Bar of Georgia in September 2005, and he was disbarred in May 2006.

This case was investigated by Special Agents of the Federal Bureau of Investigation and the Clayton County District Attorney’s Office, assisted by the Henry County Police Department and the Peachtree City Police Department.

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Former Georgia Real Estate Agent Sentenced to 14 Years in Federal Prison for Mortgage Fraud

Joseph Sterling Jetton, 61, of Woodstock, Ga., was sentenced October 10, 2008, to 14 years in federal prison to be followed by five years of supervised release and ordered to pay $11,194,300 in restitution on charges of conspiracy, bank fraud, wire fraud and money laundering related to a multi-million dollar mortgage fraud scheme. Jetton was convicted by a jury on Nov. 26, 2007, after a three week trial, and was sentenced today by U.S. District Judge Beverly B. Martin.

According to U.S. Attorney David E. Nahmias and the information presented in court, Jetton orchestrated a mortgage fraud scheme that involved millions of dollars in fraudulently inflated mortgage loans being provided to unqualified straw borrowers from late 2004 through early 2006. The straw borrowers were paid through shell companies as much as $600,000 per property from the fraudulently obtained loan proceeds. Jetton wrote sales contracts that failed to disclose that the sales prices of the residences had been inflated and that hundreds of thousands of dollars out of the loan proceeds were going to the buyers and others. Jetton personally derived more than a $1 million in commissions from the mortgage fraud scheme.

"This defendant was a licensed real estate agent. Using his specialized knowledge of real estate and residential mortgage financing, he orchestrated a mortgage fraud scheme that has caused millions of dollars in losses to lenders and untold damage to neighborhoods," said U.S. Attorney Nahmias. "Nearly a dozen people have been sentenced to federal prison for their involvement in this defendant's scheme. The long prison sentence handed down today accounts for his leadership role in the scheme and the misuse of his position as a real estate agent to commit the fraud. We will continue to work with federal, state and local law enforcement agencies to vigorously investigate and prosecute mortgage fraud schemes, especially those perpetrated by professionals in the real estate industry."

Eleven other defendants have already been sentenced to prison terms in related cases, with sentences ranging from eight months to more than ten years in federal prison. Raymond Joseph Costanzo Jr., 63, of Clayton, Ga. -- a closing attorney in the scheme -- was sentenced to three years and five months in federal prison. A loan broker in the scheme, Olympia D. Ammons, 31, of St. Louis, Mo., was sentenced to five years and three months in prison to be followed by four years of supervised release, and was ordered to pay $7,549,044 in restitution.

Assistant U.S. Attorneys Gale McKenzie, William L. McKinnon Jr. and Douglas Gilfillan prosecuted the case. This case was investigated by Special Agents of the FBI.

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