Opinion ID: 766939
Heading Depth: 3
Heading Rank: 1

Heading: Land Acquisition Loans (Counts 2-12, 21-23, 26-28, 30, 31-33)

Text: 5 Neder obtained twelve land acquisition loans, each of which was for an amount greater than the purchase price Neder actually paid for the land involved. For each loan, Neder represented to the lenders that he, through a limited partnership he controlled, had contracted to purchase land from a corporation at a certain price. From the contracts, the sales between the limited partnerships and corporations appeared to be arms' length transactions. The purchase contracts indicated that Neder's limited partnerships had made substantial down payments, totaling more than $3,587,000. Neder also submitted appraisals indicating that the purchase price his limited partnerships had agreed to pay was equal to or less than the fair market value of the land. In each case, the lenders agreed to loan Neder seventy to seventy-five percent of the purchase price which his limited partnership had agreed to pay the seller-corporation. 6 However, these purchases were actually part of Neder's land-flip scheme. Neder controlled both the seller-corporation and the buyer-limited partnership. Neder used his corporations as nominees or intermediaries to buy property from third-party land owners at one price (the initial price). His nominee corporation simultaneously resold that same land to his partnership at a substantially higher price (or the inflated price). The loan amounts, based on the higher, inflated prices, actually exceeded the total initial prices. Thus, from the loan proceeds, Neder was able to pay the entire initial sales prices to the third-party sellers and still have a total of over $7 million left over from these loans. 7 In each land flip, a check was issued to Neder's corporation for the difference between the amount of the loan to his partnership and the initial price paid to the original, third-party seller. Even though payable to his corporation, Neder endorsed the checks, payable to himself, and deposited them in his personal account. In this way, Neder fraudulently obtained more than $7 million from these loans. 3 8 Neder concealed from the lenders that he was taking these loan proceeds. Neder also concealed his interest in the corporations by having someone, such as his friend Horace Marsh, sign documents as the corporation's president. For two loans, Neder also submitted written affidavits falsely stating that he had no relationship to the seller-corporations and that he was not sharing in the profits the corporations would receive from the land sales. 9 In addition, Neder had not paid the down payments as indicated in the purchase contracts. Neder claimed that he would bring checks for the amount of the down payment to closing, but those checks would not be cashed. The down payment would simply be netted out at closing. 10 The loan officers for these loans all claimed that they would not have made these loans-or, at least, would not have made them on the same terms and conditions-had they known the truth. For instance, the loan officers each indicated that the down payment representations in the land sale contracts were crucial to their lending decisions and that they would not have made loans based on the inflated prices in the land sale contracts between Neder's partnerships and corporations if they had known Neder's corporation actually bought the property at a lower initial price.