APPRAISERS MAY BE CHARGED WITH BANK FRAUD

By Kent Berk on November 12th, 2009 in BLOG

Although the main focus of this site is civil (not criminal) liability of appraisers for negligent misconduct, the government does have the right to bring criminal charges against appraisers who commit fraud and other criminal misconduct. One such example is the indictment brought against appraiser Kurt Douglas Holm for, among other charges, Conspiracy to Commit Bank Fraud and Bank Fraud.

According to the indictment filed in the United States District Court for the District of Arizona on March 26, 2008, the alleged co-conspirators “directed appraiser Holm to prepare appraisals that valued the properties at a price required to make a profit on the sale rather than the actual value of the property. This was done by providing Holm the amount of loan needed before he conducted the appraisal. Holm inflated the value of the property by including in the appraisal improvements to the property that did not exist. For example, he included non-existent improvements such as roads, sewer systems and electricity.” This was all allegedly done in order to inflate the value of the property and to obtain loans for more than the true value of the property. But, on November 3, 2009, the United States filed its Motion to Dismiss the charges against Appraiser Holm without prejudice (meaning the charges could be refiled) becuase it was in the best interests of the government. On November 5, 2009, the Court entered its Order dismissing the charges against Mr. Holm.