Legal Ethics

Real Estate Closing Attorney Wins Reversal of 'Honest Services' Mortgage Fraud Conviction

A former North Carolina real estate closing attorney who had faced up to 25 years in prison after being convicted in a $15 million mortgage fraud case two years ago has won a reprieve.

A federal judge on Friday reversed the guilty verdict against Victoria Sprouse, 40, holding that the indictment and jury instructions were fatally flawed under a subsequent U.S. Supreme Court ruling concerning the former president of Enron and “honest services” fraud, the Charlotte Observer reported.

Because Sprouse received no kickback or other material gain from the fraudulent real estate deals at issue, only her usual closing fees, she can’t be convicted under a law that makes it a crime to fail to provide the honest services expected of someone acting in her professional capacity, the article explains. Sprouse and her counsel had contended at trial that she was duped.

Prosecutors in her case couldn’t be reached for comment on Friday, but Sprouse’s defense lawyers hope the case against her will simply be dropped rather than retried.

“Ms. Sprouse has been through this lengthy investigation since 2004, has run the gauntlet of a highly stressful trial, has surrendered her law license, and has lost everything financially,” said Will Terpening, one of her attorneys, in a written statement.

Earlier coverage: “I Didn’t Know What I Was Signing, Testifies ‘Ruined’ NC Real Estate Attorney” “NC Lawyer Convicted in $15M Mortgage Fraud Case”

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