Defendants charged in mortgage fraud scheme go to court

Debbie Dujanovic and Tom Callan reporting Six defendants are accused of illegally inflating home values and scheming millions of dollars from lenders. All of them made their initial court appearances this morning. Today was the first step in federal court. All six entered not guilty pleas to mail fraud, wire fraud and conspiracy charges.

This case centers around expensive homes in Provo. The government charges that the six conspired to skim millions off those homes.

Bradley Kitchen headed into federal court along with five other defendants. He's been accused of heading up the scheme that involved homes in an exclusive area of Utah County. And in court today the government also accused him of threatening one of the witnesses in the case.

When KSL asked him about that, he said, "No comment."

The U.S. Attorney's office says Kitchen brought in so-called straw buyers and helped them qualify for homes by inflating their incomes. The indictment also names Sandy doctor David Bolick plus four other players in the real estate industry.

The government claims the six worked together to illegally inflate home values, got loans that far exceeded what the homes really were worth, and used the excess funds to benefit themselves.

Assistant U.S. Attorney Barbara Bearnson said, "They made a significant amount of money in the course of the scheme." She says they made millions.

"They increased the price of the homes in the Provo River Bottoms, and it significantly affected the market in that area," she said.

But attorneys for the defendants question the government's case.

Dr. Bolick's attorney, Max Wheeler, said, "My first impression is that government is really reaching in this case, and there are a lot of innocent people here who've been charged with a crime."

Brad Kitchen's attorney, Greg Skordas, said, "I don't know that any of these people indicted believe they'd committed a crime or were engaging in criminal conduct, but we'll see what the evidence is."

As for the threat Kitchen is accused of, the judge ordered him to stay away from any witnesses in this case.

Each of these defendants face 20 years in prison on each count if they're convicted.

A trial date is set for Mar. 10, but given the complexity of the evidence, look for it to be pushed back, possibly several months.

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