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A federal jury found disbarred Salt Lake City attorney Jamis Melwood Johnson guilty Friday night on 27 federal charges related to a mortgage fraud scheme that used false loan documents and straw buyers to strip millions of dollars from lenders.
The jury returned the guilty verdicts after about eight hours of deliberation that started shortly after noon, following closing arguments of a two-week trial before U.S. District Judge Clark Waddoups.
The judge ordered Johnson taken into custody after the verdict was returned and set sentencing for July 18.
Johnson was found guilty of conspiracy, money laundering and wire and mail fraud. His court-appointed attorneys declined comment on the verdicts.
Johnson, 59, was indicted in March 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 loan frauds from 2005 to 2007. But jurors heard two descriptions of Johnson's involvement that were greatly at odds with each other.
In his closing argument, Assistant U.S. Attorney Adam Elggren said Johnson was at the heart of the scheme in which the group falsely inflated the appraised value of houses in order to obtain loans above the actual sales price. They recruited straw buyers and greatly exaggerated incomes and assets on loan documents and then skimmed off the difference between the actual sales price and the loan, prosecutors said.
Johnson came up with the joint venture agreements that helped the trio inflated the loan amounts by disguising from lenders the actual sale prices of the homes, Elggren said.
"We heard from witnesses that this was his baby," Elggren told the jury of 10 men and two women.
In contrast, Robert Hunt, one of Johnson's court-appointed attorneys, said that it was Haycock who directed the operation and the forging of loan documents and then disbursed the money.
"There's no evidence to Jamis Johnson was involved," Hunt said, referring to the creation of loan applications with false information.
The documents Johnson was involved with, joint venture agreements with sellers, were not fraudulent and were disclosed to mortgage brokers, he said. Hunt also claimed that an inflated loan on Johnson's own home in the upscale Federal Heights neighborhood was an "arms length" transaction.
But Assistant U.S. Attorney Scott Thorley, who got the last word with the jury, said Johnson helped to hatch the scheme and that he tried to cover his tracks by not personally signing documents and other means. Johnson even consulted with Brad Kitchen about Kitchens' indictment in an unrelated mortgage fraud case about how to prevent exposure to prosecution, Thorley said, and then began to discuss who might be witnesses against him and to plan how to insulate himself from charges.
"This is what's most disturbing," the prosecutor told the jury.
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, defense attorneys told jurors.
Johnson lost his law license in Utah for misappropriation of client funds in 1999 and was convicted of securities fraud in Millard County in 2007, according to court documents.