Lawyer charged in $1M mortgage fraud scheme

NORFOLK

A local lawyer has been charged in federal court with wire fraud in what authorities allege was a $1 million mortgage fraud scheme.

Stephen M. Gunther, who lives in Hertford, N.C., and has his law office in Virginia Beach off Princess Anne Road in Kempsville, is accused of failing to identify third parties involved in four home sales in 2006.

The unidentified third parties, called straw purchasers, had agreements with Gunther that he failed to disclose at the real estate closings, according to criminal papers made public Wednesday in U.S. District Court.

The undisclosed agreements included down payments Gunther made on behalf of the buyers, who in turn paid Gunther a small fee, according to the court records.

Mortgage companies sustained more than $200,000 in losses when four of the five homeowners defaulted on their loans, court records say.

Gunther remains free pending a court date that has not yet been scheduled.