Sentence upheld for ex-owner of Freedom Financial; prosecutors wanted longer prison term

Court upholds sentence in mortgage fraud

LITTLE ROCK, Ark. — A federal appeals court on Monday dismissed a request to open a hearing into extending the prison sentence of mortgage broker Nelson Miller, who was convicted in January 2008 of fraud and conspiracy to commit fraud.

The 8th U.S. Circuit Court of Appeals decision means that Miller, who has served his year-and-a-day prison sentence, will not be locked up again as long as he meets the terms of his probation.

Miller owned Freedom Financial in Little Rock, which made money by charging borrowers commissions and charging fees to lending companies who bought the loans. He and a number of his employees were indicted in 2004, for allegedly hiding the true value of properties and the credit worthiness of the borrowers. The company also did not disclose when properties were encumbered by other debt or did not have clear titles.

The loans involved in the fraud totaled $3.8 billion, which led to Freedom Financial gaining $355,191 in fraudulent fees and commissions.

Several coconspirators pleaded guilty and cooperated with the U.S. Attorney’s Office. Miller was convicted by a jury of one count of conspiracy to commit wire fraud and 15 counts of wire fraud. In addition to the prison sentence, he was ordered to pay a $40,000 fine and given five years of probation. The Federal Bureau of Prisons Web site shows Miller was released on July 22.

Prosecutors appealed on the grounds that U.S. District Judge J. Leon Holmes had not taken into account the losses encountered by the borrowers in his sentencing of Miller.

The appeals court disagreed, citing the presentence investigation, which said there was “no evidence the coconspirators intended to cause loss involving foreclosure to the lenders; their intent was to process the fraudulent loans and receive the fees and commissions. Foreclosures were an unintended result in some instances.”

The investigation found there was intended and actual loss to the victims, but that the sums could not be determined, the appeals court noted. It said only a proven loss to the victim could be used to enhance a sentence.

The U.S. Attorney’s Office didn’t immediately respond to a request for comment.

Miller’s attorney, Gary D. Corum of Little Rock, said he was pleased by the decision and that it should put an end to the case.

“I think this was it. I’m not aware of any lingering matters,” Corum said.

Corum said he had not yet heard back from Miller, whom he said had moved to Louisiana. The AP could not find a current phone listing for Miller.