Date: 07-28-2015

Case Style: United States of America v. Herschell Harvell, Jr.

Case Number: 1:14-cr-00059-WSD-CMS

Judge: William S. Duffey, Jr.

Court: United States District Court for the Northern District of Georgia (Fulton County)

Plaintiff's Attorney: Douglas W. Gilfillan

Defendant's Attorney: Edward T. M. Garland and John Aspinwall Garland

Description: Atlanta, GA - Former HUD-OIG Special Agent in Charge Convicted of Making False Statements to Obtain a Loan

Herschell Harvell, Jr., a former Special Agent in Charge with the Office of Inspector General for the Department of Housing and Urban Development, has been convicted of two counts of making false statements to First Tennessee National Bank, N.A., to obtain a loan, after a one week jury trial.

“Harvell, who was a federal law enforcement officer with supervisory responsibility for mortgage fraud investigations and other matters involving false statements, violated the law he was sworn to enforce by making false statements to obtain a loan to finance his own private business interests,” said Acting U.S. Attorney John Horn.

“Mr. Harvell’s conviction demonstrates our commitment to bringing to justice all bad actors, even when that misconduct occurs within our very own organization. I am profoundly disappointed at the break down of trust and the violation of laws of this former employee. As this conviction shows, these ethical lapses are neither tolerated nor condoned,” said David A. Montoya, Inspector General of the Department of Housing and Urban Development.

According to Acting U.S. Attorney Horn, the charges, and other information presented in court: The Office of Inspector General (OIG) for the Department of Housing and Urban Development (HUD) investigates and prevents fraud and abuse in HUD programs. Harvell began his career with HUD-OIG as a Special Agent and in 2003, was promoted to Assistant Special Agent in Charge for HUD-OIG’s Region 9, which is based in Los Angeles, California, and encompasses several western states. Harvell was promoted in 2008 to Special Agent in Charge for the HUD-OIG region based in Fort Worth, Texas, and later served as the Special Agent in Charge of HUD-OIG’s Region 4, based in Atlanta, Georgia. As a Supervisory Special Agent, Harvell oversaw and supervised mortgage fraud investigations, as well as other matters involving false statements affecting HUD programs.

In 2008, while stationed in Los Angeles, Harvell maintained a portfolio of six rental homes in the Atlanta area, all of which were mortgaged, with monthly payments in various amounts. In addition, between January and March 2008, Harvell acquired and opened a Precision Tune automobile care franchise, also in the Atlanta area. The start-up costs for the owner of a new franchise location, such as Harvell’s, ranged from $100,000 to over $200,000. To fund the costs of his new business, in February 2008, Harvell cashed in a certificate of deposit that he held worth approximately $70,000. Over the next five weeks, Harvell spent this amount and more on his Precision Tune business and other expenses, including payments on his rental homes.

On March 25, 2008, Harvell obtained additional cash by refinancing one of his rental homes. Harvell attended closing and signed a loan application and other documents to obtain a refinance loan for $165,000 from First Tennesse Bank, N.A. Harvell received approximately $23,000 from this loan. Although he had cashed in and spent the certificate of deposit and additional funds, Harvell’s loan application falsely stated that he still owned this certificate of deposit. In addition, Harvell’s loan application falsely stated that he received a total of $6,180 per month in rental income from his portfolio of investment homes. Although some of Harvell’s houses were rented, he was receiving roughly half that amount, or less, on a monthly basis when he closed the loan. Harvell’s loan application also failed to disclose his Precision Tune business and associated costs and liabilities that he was incurring to open that business.

In addition, Harvell’s loan application stated that his permanent residence was in Georgia. During the course of approving the loan, First Tennessee Bank’s underwriter asked Harvell to explain a Los Angeles post office box that appeared on Harvell’s bank statements. The underwriter posed this question to determine whether Harvell had living expenses in Los Angeles that were not disclosed on his loan application. In response to the underwriter’s question, Harvell wrote a letter falsely stating that his employment required him to work in California during the weekdays and that he resided with relatives while on work assignments there. In truth, Harvell lived in Los Angeles and paid rent there, which was not disclosed to the underwriter.

While in Atlanta to close the loan from First Tennessee Bank on March 25, 2008, Harvell applied to a different lending institution for a cash-out refinance loan on a different investment property. When this second loan closed on April 14, 2008, Harvell received over $17,000. Harvell’s loan application contained the same false statements and omissions as his March 25, 2008, loan application to First Tennessee Bank.

Sentencing for Harvell has been scheduled for 2:30 p.m. on October 1, 2015, before United States District Judge William S. Duffey, Jr.

This case is being investigated by the Department of Housing and Urban Development, Office of Inspector General, Special Investigations Division, Washington, DC.

Outcome: See above

Plaintiff's Experts:

Defendant's Experts:

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