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A federal judge sentenced a Salt Lake City man to two years in federal prison after his guilty plea for real estate fraud schemes in West Virginia and California. A second Utah man also faces sentencing in the case that led to $7.5 million in losses by lenders.

Michael S. Hurd, 37, was sentenced to two years and three months for his part in orchestrating frauds tied to falsely inflated appraisals that led to loans for more than the market value of properties.

"This is the sort of activity that contributed to the financial collapse," U.S. District Judge Thomas Johnston said last week when sentencing Hurd, according to a news release from the U.S. Attorney's Office for the Southern District of West Virginia.

Another Utah man, Raymond Morris, 51, South Weber, also pleaded guilty in the case to wire fraud and bank fraud. Morris faces up to 30 years in prison and a $1 million fine when he is sentenced by Johnston Oct. 29.

Hurd pleaded guilty to conspiracy to commit wire fraud and bank fraud involving properties in Hurricane, W.Va. He also pleaded guilty to mail fraud related to a scheme in Modesto, Calif.

The two cases were combined, and Hurd was sentenced in Charleston, W.Va.

Johnston noted that Hurd had faced significantly more time in prison, but received a reduction at the government's request because of his cooperation against Morris and others, which led to further prosecutions in West Virginia, California and Utah.

In July, Morris was charged in U.S. District Court in Salt Lake City with money laundering in a case involving companies he owned or controlled, including E&R Holdings, Wise Financial Holdings and Momentum Leasing.

The charges say instead of using investors' monies as he had outlined, Morris used funds for personal expenses, to purchase a home and cars, and to make interest payments to initial investors. He agreed to plead guilty to the felony charge, according to court records.

Hurd operated a company called "The Gift Program" in the early and mid-2000s that he claimed did deals in which sellers paid down payments and initial mortgage payments on real estate. But Hurd admitted that instead of sellers providing those payments, he obtained inflated appraisals and then used funds from lenders for down payments and initial mortgage payments.

Morris found investors to purchase properties at the fraudulently inflated prices and Hurd then used The Gift Program to fund the transaction. Investors eventually defaulted on the loans, causing millions of dollars of losses to lenders.

Hurd also admitted he illegally flipped 20 properties in Modesto.

James R. Thornton, 48, Wilmington, N.C., pleaded guilty and received a reduced sentence last year of five years of probation. Deborah L. Joyce was sentenced to three years and 10 months in prison for involvement in the West Virginia subdivision, and her husband, Todd, received a sentence to one year and six months in prison.

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