Marshall Biddle, a Myrtle Beach lawyer representing Shuman, could not be reached for comment.
Shuman – owner of Diamond Casino Cruise LLC in Savannah, Ga. – in court documents denies any role in the alleged fraud, and said in a deposition taken in October that the entire transaction “was done by Darin Epps.”
The bank, however, says the paper trail shows a different story.
In a motion for summary judgment filed this month against Shuman, RBC Bank attached 63 exhibits containing 643 pages of canceled checks, bank wire transfers, corporate records, real estate documents and other evidence it says it says links Shuman to the alleged fraud.
The HUD-1 settlement statement from the sales transaction – which is included in the court filing – shows McKean Properties sold the Myrtle Beach Villas II condo to Onson Lopez of Hope Mills, N.C., for $610,000 on March 11, 2008. Shuman is the managing member and president of McKean Properties.
The settlement statement shows McKean Properties received $232,846.43 in profit from the condo sale.
Two days after the closing, on March 13, 2008, McKean Properties issued a check totaling $177,846.43 to Epps – an amount exactly equal to the sale proceeds minus $55,000.
Epps, through a company he owned called Synergy Investments, sent another check that same day totaling $135,000 to Kevin Mayberry.
Mayberry has been married to Lopez since May 18, 2006, according to a marriage license RBC Bank obtained from Cumberland County, N.C., public records.
Also, when Lopez applied for her loan to buy the condo, Mayberry signed a letter in which he claimed to be the human resources manager at Lopez’s place of business to verify her employment, court documents show. That letter – which was sent to the bank by Dunes Mortgage, another company Epps owned – was part of Lopez’s loan application.
Mayberry also was a witness at the real estate closing, according to property records.
RBC Bank alleges Shuman retained $55,000 from the sale proceeds and that Epps kept $42,846.43 from the check Shuman sent as payment for his role in the alleged scheme. The bank also says that the payment to Mayberry was for his wife’s agreement to be the shell buyer for the condo.
RBC Bank ultimately loaned $610,000 to Lopez through a first mortgage and home equity line of credit. Lopez defaulted on both loans and the condo was sold at a foreclosure auction in 2010 for a little more than $100,000. While the bank obtained a judgment against Lopez for the balance owed, it has not collected any money.
Shuman, in his deposition, could not explain why he sent the six-figure check to Epps. He initially said the money was a loan to Epps, but he could not remember why he made the loan and he did not have any promissory note.
“When confronted with the fact that payment to Epps came within two days of the Lopez closing and was exactly $55,000 less than McKean Properties received at closing, Shuman acknowledged that this payment could have been related to the Lopez closing,” Gerald Meek, a lawyer representing the bank, said in court documents.
In addition, the HUD-1 statement shows a $12,000 payment to J&J Enterprises LLC for a “marketing and consulting fee.”
Shuman said in his deposition that he was not aware of any marketing or consulting work done in connection with the condo sale. Shuman also said that he was not aware of the payment to J&J Enterprises because he did not read the HUD-1 statement before signing it.
J&J Enterprises is a corporation formed by Jeremy Eason, who worked with Epps at Dunes Mortgage. Eason was indicted in January on a felony charge of conspiring to commit bank fraud. That indictment states that Eason conspired to deceive RBC Bank about the value of properties involved in several real estate transactions and the creditworthiness of buyers who got loans. A bench warrant has been issued for Eason’s arrest, and he is believed to have fled the country.
The paper trail for the Lopez loan is similar to a pair of other transactions in which Shuman was the seller of Myrtle Beach Villas II condos, according to court documents.
In the Nov. 13, 2007, sale of unit B-103 to Michigan resident Muhammad Javed, bank records show Myrtle Beach Villas II received a check totaling $285,078.41 from the closing proceeds. Shuman deposited that check into the Myrtle Beach Villas II bank account at 3:56 p.m. that day. Twenty minutes later, Shuman transferred $130,000 from the Myrtle Beach Villas II account to Diamond Real Properties, another entity controlled by Shuman, court documents state.
The next day, Shuman transferred the $130,000 from Diamond Real Properties to AAA Building and Development Co. in Michigan. That company is controlled by Adebuwale Ajagbe, who signed as a witness when Javed got his mortgage for the Myrtle Beach Villas II condo.
Shuman also sent a $25,804 cashier’s check from the Javed closing to Celebrity Vacations, which is owned by Myrtle Beach residents Alissa Smith and Jim Putnam. Smith and Putnam have pled guilty in federal court to unrelated felony charges of conspiring to defraud the United States by preparing fraudulent HUD-1 statements. They are awaiting sentencing.
And in another transaction – this one a Jan. 10, 2008, sale of unit A-305 to California resident Robert Riley – Shuman purchased a cashier’s check from First Federal bank from money taken from his personal checking account, court exhibits show. The cashier’s check – which referenced the Riley transaction and was a purported down payment for the condo – was payable to the trust account of Myrtle Beach lawyer Robert Gwin, who conducted the real estate closing. The remitter on the cashier’s check – which totaled $41,386.33 – was falsely identified as Robert Riley, according to court documents.
Myrtle Beach Villas II received a $200,660.78 check from the real estate closing, which Shuman deposited into the corporate account at 4 p.m. on Jan. 10, 2008. One minute later, Shuman transferred $41,386.33 from the Myrtle Beach Villas II account to his personal checking account – thus repaying himself for the down payment he had made on the Riley condo, according to court documents.
One day later, Shuman used the Myrtle Beach Villas II account to purchase a $43,274.45 cashier’s check made payable to Celebrity Vacations. He also wired $116,000 to Down to Earth Ventures, a California company controlled by Mike Wimberly, who allegedly recruited Riley to be a straw buyer for the condo. On Jan. 14, 2008, Wimberly wrote a $15,000 check to Riley from the Down to Earth Ventures bank account.
“Shuman knowingly participated in a scheme designed to defraud lenders by selling properties at inflated values to straw buyers and then distributing the excess proceeds to co-conspirators,” Meek said in the RBC Bank court filing. “The scheme’s participants included recruiters who found buyers for the properties, brokers and other facilitators who – often through fraud – pushed the transaction through to completion, and sellers who agreed to allow the proceeds to be distributed to the scheme’s participants.
“Shuman was indispensable to the scheme’s success,” Meek said. “The scheme could not work unless there was a seller who was willing to pay kickbacks to his co-conspirators, either at closing through the HUD-1 or after closing out of the seller’s proceeds.”
Shuman, during his deposition, told the bank’s lawyer nearly 200 times that he either did not know or could not remember details about the real estate transactions.
“This whole situation with Myrtle Beach Villas with me is like a cloud, you know, and I’m not trying to be smug about it and I know it sounds like I’m trying to hide something, but I’m not trying to hide anything,” Shuman said. “I don’t know.”
Shuman has not yet responded to RBC Bank’s motion for summary judgment and no court date has been scheduled.
Purchases spark felony fraud charges
Stephen Yura, a Myrtle Beach man with ties to Eason and Dunes Mortgage, is facing three felony mortgage fraud charges related to a trio of homes he bought during a two-month span beginning in December 2007, according to an indictment issued in federal court.
Yura is charged with knowingly making false statements on credit applications for the homes to influence lenders to give him mortgages. The homes were located in the Pines of St. James, Hunter’s Ridge Plantation and Mallard Landing neighborhoods throughout the Grand Strand.
Yura defaulted on all of the mortgages and the homes wound up in foreclosure within months, court records show.
Horry County property records show Dunes Mortgage originated at least one of the three home loans. Those records also show that Yura bought another home during that two-month period from Eason in the Glenmere subdivision. That home loan is not a part of the indictment, which was issued last month.
Eason also was listed as Yura’s landlord in bankruptcy court documents Yura filed in 2005. Yura and his wife, Julie, also filed for bankruptcy protection in 2010. That case was dismissed last month because the Yuras failed to make payments to the trustee.
Yura is facing a maximum sentence of 30 years in prison and a $1 million fine for each charge. He is scheduled to be arraigned in federal court in Florence on Tuesday.
