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Spammers Convicted in $2M Loan Fraud Scheme

Fraudsters collected 'advance fees' from borrowers who couldn't get conventional loans

For two years between 2003 and 2005, Michael Wyatt and his partners made a promise to desperate borrowers on the Internet: Pay me 10 percent up front, and we'll loan you the money you need -- even if you can't get credit elsewhere.

During that two years, Wyatt and his associates collected approximately $2 million in advance fees, according to law enforcement agencies. He lived well, bought a car, and put a down payment on a $2.4 million home. His victims, on the other hand, never got their loans -- and they never got their "advance fees" back.

Yesterday, however, a New Hampshire jury convicted Wyatt on one count of conspiracy to commit wire fraud, which carries a maximum penalty of 20 years in jail. His associates, Larry and Christopher Stallings of Wautaga, Texas, were convicted June 28. All three face sentencing on January 23.

"The advance fee loan scheme is a form of fraud that continues to take advantage of innocent victims," said U.S. Attorney Tom Colantuono upon the conviction. "Unfortunately, those who engage in this scheme fraud now use the Internet to locate victims. This type of financial fraud can have a devastating impact on its victims. This office is committed to prosecuting those individuals who would use the Internet and other means to defraud victims.”

Wyatt and his cohorts probably will not get the full 20 years under federal sentencing guidelines, the agencies said.

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Tim Wilson is Editor in Chief and co-founder of Dark Reading.com, UBM Tech's online community for information security professionals. He is responsible for managing the site, assigning and editing content, and writing breaking news stories. Wilson has been recognized as one ... View Full Bio

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