A member of a Utah County group accused of conspiring in an $18 million mortgage fraud scheme, pleaded guilty to a charge in federal court Tuesday.
Bradley Grant Kitchen, 41, entered a plea to conspiracy to commit mail and wire fraud in U.S. District Court. In exchange for his guilty plea, federal prosecutors have agreed to drop 18 other counts in an indictment.
When sentenced, Kitchen faces a statutory maximum of 20 years in federal prison, however prosecutors have agreed to recommend a lower sentenced based on Kitchen's acceptance of responsibility.
Prosecutors allege that Kitchen and five others with ties to the Utah County real-estate industry, formed a network to obtain a series of loans on properties at Provo's posh River Bottoms area. The group then inflated the market values of the properties. Kitchen said he worked with co-defendant David R. Bolick and the two agreed to conduct property purchases through Bolick's company, Home Owners Group (HOG), backed up by another of Bolick's companies, Paragon Investment Group (PIG). The two then purchased properties using false statements on loan applications and using false appraisals to inflate the market values of properties.
Bolick has denied the allegations and has pleaded not guilty. A jury trial has been scheduled for Aug. 13.
Kitchen and Bolick are also accused of recruiting "straw buyers" who allowed them to use their credit to secure loans. The indictment states many of the loan applications contained overstatements of income and other inaccurate information.
Other lower-level participants have pleaded guilty in state court and have agreed to testify against the six charged in federal court at trial.Federal prosecutors estimated Kitchen may be asked to pay as much as $7 million in restitution when sentenced and given his guilty plea, may face criminal forfeiture action against his assets.