(KMOV) – A local broker has been sentenced to 33 months in prison for bank fraud.
Randall Penberthy, Jr. of St. Charles pleaded guilty to one felony count of bank fraud last February. He was a real estate broker in the St. Louis area.
Court documents show that Penberthy recruited investors to finance distraught property owners’ homes in danger of foreclosing with bank loans in late 2006 and October 2007. He knowingly placed and recorded second or third mortgages that did not legally exist. The bank loans were used to pay off the fraudulent mortgages to business entities owned by Penberthy.
Penberthy’s method caused more than $500,000 in losses for financial institutions. Restitution will be figured out at a later date by the court.