The leader of a multimillion-dollar bank fraud scheme, Kotto Yaphet Paul, was sentenced to 15 years in prison, as announced by Russ Ferguson, U.S. Attorney for the Western District of North Carolina. Paul, 50, from Waxhaw, N.C., will also serve five years of supervised release. His co-conspirator, Latoya Tameika Ford, 50, from Covington, Georgia, received a sentence of 27 months in prison followed by three years of supervised release. Both individuals admitted guilt to charges including conspiracy to commit wire fraud and bank fraud. Additionally, Paul pleaded guilty to money laundering and aiding and abetting.
Another participant in the scheme, Bruce Howard Marko from Charlotte, was sentenced earlier this year to just over a year in prison and ordered to pay $1.5 million in restitution. Love Norman from West Palm Beach is awaiting sentencing after pleading guilty to similar charges.
Several other defendants were previously convicted for their roles in the conspiracy: Amrish D. Patel received a 15-month sentence; Dwight A. Peebles Jr., 18 months; Denise Woodard was sentenced to three years; and Derrick L. Harrison received a sentence slightly over one year. Restitution amounts for these individuals ranged between $620,000 and more than $3 million.
Court documents reveal that starting in 2018, the conspirators defrauded at least 17 federally insured financial institutions out of over $17 million through fraudulent loans. Paul orchestrated the scheme with assistance from Ford and others who prepared false loan applications using fabricated documentation such as income statements and tax returns.
The fraudulent loans included business loans supposedly for equipment purchases or land development and residential mortgage loans. Despite claims on the applications regarding loan purposes, funds were used for real estate purchases and personal expenses among other uses.
Paul also engaged in money laundering related to the fraud scheme by executing transactions with illicitly obtained funds—one example being a nearly $400,000 wire transfer used by Norman for purchasing property in Florida.
Most loans defaulted resulting in significant losses for the financial institutions involved.
U.S. Attorney Ferguson acknowledged several agencies including multiple Offices of Inspector General along with FBI Charlotte and IRS Criminal Investigation’s Charlotte Field Office for their roles in investigating this case. Assistant U.S. Attorney Don Gast is prosecuting.
