Kelly Abercrombie was sentenced to 15 months in prison and ordered to pay restitution for her role in a mortgage fraud scheme led by Sarasota mortgage broker Todd Kolbe that resulted in $1.8 million in losses for a New Jersey mortgage lender.
Though Abercrombie will have to report to prison by Feb. 18, she was clearly relieved that the trial was over.
She smiled at her friends and family as she walked to join them at the back of the Tampa courtroom.
In deliberating her sentence, U.S. District Court Judge Susan Bucklew said Abercrombie did not deserve as much time in prison as Kolbe -- the undisputed mastermind of the scheme serving 30 months in a South Dakota prison.
But Bucklew also said that Abercrombie's crimes were not minor, and that she deserved more than the six-month sentence she handed down last month to Mary Bolan, a Manatee County real estate agent who also participated in the conspiracy.
"It was a serious offense," Bucklew said to Abercrombie as she delivered her sentence. "It involved a lot of money. A lot of money was lost, and you knew about it from square one."
Abercrombie is the fourth person to receive prison time for participating in a crime that involved buying 30 properties in Sarasota and Manatee counties, jacking up the values through sham real estate sales to friends and family members, and then using bogus appraisals to get more than $8 million in loans from Montvale, N.J.-based Home Star Mortgage Services and its predecessor company.
Kolbe's boyfriend, Kirk McVey, also received a 30-month prison sentence for acting as straw buyer in the scheme, while Kolbe's sister-in-law, Amy Samelson Kolbe, was sentenced to four years probation.
Kolbe makes an appearance
Sentencing lasted four hours on Monday, with Kolbe taking the witness stand in an orange, Hillsborough County Jail jumpsuit.
Kolbe, who was transported from prison in South Dakota, answered questions from Amercrombie's attorney, Peter George, before being led back out for his return trip north.
George's purpose in questioning Kolbe was to minimize Abercrombie's role in the crime.
Though he acknowledged that Abercrombie forged signatures on appraisal documents to get loans from Home Star in 2001 and 2002, George argued that the signatures were "a meaningless, superfluous act."
"What she did was wrong," George said. "But what she did was truly the ant on the elephant's behind."
Bucklew did not buy it.
"You think she ought to get a bye for forging signatures," asked Bucklew, chuckling with disbelief.
"That act is significant."
The judge added that the crimes that Abercrombie participated in were sophisticated and required more than minimum participation.
Bucklew also dismissed George's argument that Abercrombie should not have to repay any of the $1.78 million in losses that Home Star accumulated because of the actions of Kolbe and his associates.
The judge ordered Abercrombie to start paying $500 a month restitution as soon as she gets out of prison.
Bolan, by contrast, has been ordered to pay $150 a month.
Abercrombie did not testify in her sentencing, but she read a statement in which she apologized to the court for her crimes and to her friends and family for the embarrassment she caused them.
As to why she forged signatures, Abercrombie said, "Kolbe had a way of explaining things and you'd buy into it.
"Somehow, it should not have made sense, but it did."
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TAMPA -- With her blond hair hanging over the shoulders of her neat business suit and her fresh face turned toward the witness stand, Kelly Abercrombie looked like the least likely person to commit mortgage fraud.
But she is facing as much as 46 months in prison for her role in a scheme orchestrated by her longtime business partner, Todd Kolbe, which resulted in $1.8 million in losses for a New Jersey mortgage lender.
Abercrombie pleaded guilty to conspiracy to commit wire and mail fraud in June, and faces sentencing today by U.S. District Court Judge Susan Bucklew.
Abercrombie's attorney, Peter George, is arguing that his client deserves a lesser sentence because Kolbe manipulated her into taking part in fraudulent real estate deals and into forging signatures on appraisal documents.
Neither Abercrombie and her husband, Todd Kerber, nor George returned calls seeking comment about their real estate deals.
Federal prosecutors, led by Dennis Moore, have argued that Abercrombie, who has been Kolbe's closest business associate for more than a decade, was a full partner in the scheme to defraud mortgage lenders.
Whatever the judge decides, the damage has already been done. The crimes that Kolbe and Abercrombie committed have hurt banks across the region. They have distorted the regional real estate market and helped to inflate taxable property values.
In their case against Abercrombie, federal prosecutors concentrated on 30 fraudulent real estate transactions, the bulk of which involved properties in Manatee County. But she was involved in many more questionable property sales in connection with the Kolbe family.
For example, Abercrombie helped bounce condo units at the Villa Le Grand development in Venice back and forth like pingpong balls between members of the Kolbe family and Ohio businessmen Wesley Luburgh and Brady Skinner. The result was that values of the units increased 30 percent between 1999 and 2001.
A single piece of property at 9225 Blind Pass Road on Siesta Key was sold seven times between Abercrombie, Kolbe, Luburgh and Skinner over a six-year period. In the process, the four investors bid up the price from $245,000 in 1995 to $1.6 million in 2001.
Kolbe and his business associate, John Waeda, originally bought the land in June 1995 for $245,000.
Waeda sold his half to Kolbe in September 1996 for $123,714. Kolbe got a $525,000 loan from the CTX Mortgage Co., the company Kolbe worked for at the time, and built a 2,130-square-foot house.
Kolbe sold the property to Luburgh and Skinner in May 1998 for $1.025 million, and the two partners received $900,000 in loans from BankUnited and AmSouth.
Exactly one year later, in May of 1999, Luburgh and Skinner sold the property back to Kolbe for $1.1 million, and Kolbe got $1.08 million in loans from First Chicago NBD and Huntington National Bank.
Kolbe sold the property to Abercrombie in July of the same year for $1.575 million. Abercrombie obtained a $795,000 loan from Chase Manhattan Mortgage and a $980,000 loan from Washington Mutual the following year.
In July 2001, Abercrombie sold the property to Luburgh and Skinner for $1.6 million, and the two partners obtained $1.4 million in loans from BankUnited and Huntington National.
The property was not sold to an outside buyer until June 2004, when Morgan Chase Co. bought it for $1.45 million.
Deep friendship
In court testimony in October, Kolbe said Abercrombie had been one of his closest friends.
"We had a very close personal relationship for many years," he said.
Kolbe hired Abercrombie in 1991 when he was regional manager of CTX Mortgage in Sarasota, and she followed him everywhere he went over the next decade.
When Kolbe left CTX to join FirstTown in 1998, Abercrombie went with him. When Kolbe launched Sovereign Mortgage a year later, Abercrombie was by his side.
Though Kolbe said that Sovereign Mortgage grew rapidly, and eventually employed as many as 60 people in five offices, it was never profitable. Kolbe had filed for Chapter 7 bankruptcy protection in 2000 and was in no position to make up the shortfall.
"My financial situation was crunched at the very beginning of Sovereign," Kolbe said in court testimony. "I did not have the ability to come up with additional money."
In not so many words, Kolbe suggested that Sovereign cover its expenses through a series of fraudulent deals, and Abercrombie agreed.
Court records show she participated in three deals in which property values were inflated from $853,000 to $1.76 million, enabling the partners to collect $1.275 million in loans.
All three of the deals involved the preparation of fraudulent loan applications and appraisals, complete with forged signatures.
In one of the deals, Kolbe and Abercrombie said there was a house at 6250 Traylor Road in Sarasota. They even included a picture of it. It did not exist.
The appraisal was signed by Robert Hillman, a fictitious person that Kolbe created to forward his scam. Kolbe forged Hillman's signature on at least three appraisals, while Abercrombie forged the signature of Sarasota appraiser S. Mark Hill on 24 more.
Abercrombie has admitted to signing that name on eight of those documents, but she has neither confirmed nor denied signing the other documents. Kolbe testified that she signed all of them.
"I approached Kelly and said I was going to do more transactions and needed her to sign the appraisals," Kolbe said. "She was not happy about doing it, but she she didn't have a choice. The signatures on the documents needed to look the same."
Abercrombie's attorney, who began his cross-examination of Kolbe on October and will resume today, has argued that Abercrombie's signatures were a "meaningless gesture," because Kolbe cajoled and pressured her into signing.
He added that even though Abercrombie's actions were criminal, her intentions were noble.
"Kelly Abercrombie had no interest in stealing money and going to Aruba and living like a millionaire," George said. "The purpose was to put money in her business, to pay employees and meet payroll."
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