A second man has admitted his role in a multimillion-dollar mortgage-fraud scheme that grossly inflated home values in an upscale Provo neighborhood.
David R. Bolick, a Sandy pathologist, pleaded guilty Thursday to one count of conspiracy to commit mail and wire fraud in U.S. District Court. In return for his plea, federal prosecutors dropped 18 other counts in an indictment.
Bolick, 52, faces up to 20 years in federal prison. Prosecutors, however, recommended that Judge Ted Stewart lean to the lower end based on Bolick's admission of guilt. A sentencing date was not set.
Last week, Bradley Grant Kitchen, 41, entered a guilty plea to the same charge and under the same conditions as Bolick did. Kitchen has yet to be sentenced.
Prosecutors said the defendants might have to pay as much as $7 million in restitution.
Bolick and Kitchen were among six people named in a 19-count indictment alleging that they had conspired to obtain a series of loans on properties for which they fraudulently inflated the market values with false appraisals.
Bolick told the judge that he had hired Kitchen to work for his two asset-management and investment companies in August 2004. He said Kitchen approached him in December 2005 with opportunities to buy and sell properties in the posh Provo Riverbottoms.
The pair agreed to conduct home purchases through Bolick's two companies using "straw buyers" who allowed the them to use their good credit. The loan applications contained overstated incomes, claims of non-existent assets and false occupancy declarations.
Proceeds from the inflated loans, totalling at least $18 million, were diverted to participants in the scheme.
Three other defendants Steve Wells Cloward, of Orem; Ron K. Clarke, of Provo; and Jeffery David Garrett, of Provo are scheduled for trial Aug. 13.Federal prosecutors last week filed a motion to dismiss the charges against the sixth person, Rebecca Ann Hadlock, 31, of Saratoga Springs.