The Salt Lake Tribune

First published Mar 18 2011 07:27AM

Updated 5 minutes ago Updated Mar 18, 2011 05:34PM

http://www.sltrib.com/sltrib/money/51458592-79/johnson-prosecutors-federal-haycock.html.csp#

A jury began deliberations Friday in the federal court trial of a disbarred Salt Lake City attorney accused of participation in a major mortgage-loan fraud scheme.

The 12-member jury retired to deliberate shortly after noon to decide on whether to convict or acquit Jamis Melwood Johnson on 28 counts of fraud, money laundering and conspiracy.

Johnson, 59, was indicted in March of 2009 along with Ronald W. Haycock Sr., 62, of Bountiful, and Lyle Smith, 45, of Roy.

They were charged with a series of alleged mortgage frauds from 2005 to 2007 in which they formed joint partnerships with owners who were having trouble selling their homes. The partnerships allowed the trio to inflate the sale price of the homes by tens of thousands and sometimes hundreds of thousands of dollars on loan applications, prosecutors said.

They also allegedly obtained appraisals far above the market price of the houses. They then recruited people with good credit scores to act as straw buyers and greatly exaggerated their incomes and assets on loan documents, prosecutors said.

The group received loans based on the inflated values and then skimmed off the difference between the actual sale prices and the loans.

Part of the scheme was to create false assets by claiming Johnson’s company, Johnson & Associates, held hundreds of thousands of dollars from the straw buyers in escrow accounts to show they had sufficient assets for the purchases, prosecutors said.

Prosecutors said Johnson claimed to lenders that he had a law practice in New York City. But the address where he claimed to operate an office was actually an apartment building for medical residents, one witness said.

Johnson also had a telephone number with a New York prefix that actually rang in Salt Lake City, another witness said.

Much of the prosecution’s case against Johnson centered on his home in the upscale Federal Heights neighborhood of Salt Lake City.

When he was threatened with foreclosure, he and Haycock used a straw buyer to obtain a $2.2 million loan that was about $1 million more than the house was worth.

Defense attorneys said Haycock was the mastermind behind the scheme and directed all the operations, not Johnson.

Haycock pleaded guilty in the case and is awaiting sentencing. Smith reached a plea agreement with federal prosecutors and is serving a 56-month federal prison sentence.

By testifying against Johnson, both hoped for lighter sentences, a defense attorney told jurors when the trial began last week.