A Loan Party Ends in Federal Court 😐
Kotto Yaphet Paul, 50, once a familiar face in Waxhaw’s real-estate circles, left the courtroom Tuesday with a 15-year federal prison sentence and five years of supervised release, the harshest term in a scheme that steered at least $17 million from 17 federally insured banks. The decision, released by the U.S. Attorney’s Office, closed a case that spanned seven years of wire transfers, doctored tax returns, and forged statements — and it left lenders tallying losses that regulators will track for years. Justice Department press release
How the Numbers Shifted
- Start date: 2018
- Loans approved: 42
- Total take: $17 million+
- Institutions hit: 17
- Loan types: equipment, land-development, residential mortgages
- Documents faked: income, employment, bank balances, tax returns
Prosecutors said many loans defaulted, pushing costs onto deposit-insurance funds and, eventually, the public.
The Bench Sees a Cast of Eight
| Defendant | Residence | Prison Term | Supervision | Restitution* |
|---|---|---|---|---|
| Kotto Y. Paul | Waxhaw, NC | 15 yrs | 5 yrs | TBD |
| Latoya T. Ford | Covington, GA | 27 mos | 3 yrs | TBD |
| Bruce H. Marko | Charlotte | 12 mos + 1 day | 2 yrs | $1.5 m |
| Love Norman | West Palm Beach | Pending | — | — |
| Amrish D. Patel | FL | 15 mos | — | Up to $3.1 m |
| Dwight A. Peebles Jr. | FL | 18 mos | — | — |
| Denise Woodard | FL | 36 mos | — | — |
| Derrick L. Harrison | FL | 12 mos + 1 day | — | — |
*Restitution figures drawn from court orders; several remain under seal. Source: Justice Department press release
False Fronts, Real Cash
Prosecutors describe a methodical routine. Paul’s crew invented companies, drafted payroll records, photocopied balance sheets and pasted IRS logos onto empty forms. Applicants claimed six-figure salaries on businesses that owned no equipment. Banks, pressed for commercial growth, approved funds in days. Money flowed to real estate deals, car lots and personal accounts rather than the projects named on applications.
What Regulators Face Next
The Office of the Inspector General for the Federal Reserve, FDIC and IRS joined the investigation. Banking lawyers expect updated underwriting checklists, especially for smaller community lenders that handled many of the bad notes. One Charlotte banker, speaking on background, called the case “a conference-room cautionary tale.”
Local Fallout
Charlotte’s finance sector, already watching loan-quality metrics, will measure how far the defaults reach. No local institution has released a public loss figure. Investor relations teams stayed silent after Tuesday’s ruling.
The Paper Trail
The case first broke in local press. See the detailed chronology by the Charlotte Observer report for the hearing timeline and defendant backgrounds.
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Jack Beckett files long-form at The Charlotte Mercury, usually over a large house roast at Einstein Bros. on South Boulevard. (The staff knows to keep the lid tight; Jack types fast.) Thanks to the bagel crew for keeping local journalism percolating. Explore our vault—breaking scoops, zoning maps, council votes, nostalgia threads—at the links above, and never be shy: message us on Twix.
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This article, “Waxhaw Banker Draws 15-Year Sentence in $17 Million Loan-Fraud Case,” by Jack Beckett is licensed under CC BY-ND 4.0.
“Waxhaw Banker Draws 15-Year Sentence in $17 Million Loan-Fraud Case”
by Jack Beckett, The Charlotte Mercury (CC BY-ND 4.0)
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