SHREVEPORT, LA—William Everett Nichols, 56, of Alexandria, La., President and sole shareholder of First Fidelity Mortgage, Inc., was sentenced to six years in federal prison and ordered to pay $3,903,071.00 in restitution for bank fraud, Acting United States Attorney William J. Flanagan announced today. Today’s sentence was imposed by U.S. District Court Judge Donald E. Walter in Shreveport.

Nichols pleaded guilty to bank fraud in November 2009. The FBI investigation of Nichols and First Fidelity Mortgage, Inc., doing business as Southern Funding, showed that Southern Funding was involved in the mortgage lending business and provided mortgages to customers in central Louisiana. Sabine State Bank and Peoples State Bank of Many, Louisiana, provided credit to Southern Funding for mortgages which were secured by customer notes pledged by Southern Funding to the banks. Nichols also had private investors as a funding source.

Nichols forged signatures of borrowers and provided the forged notes as collateral. He is responsible for a total amount of loss to banks and private investors of $3,903,071.00.

The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Alexander C. Van Hook.

Matthew B. Pizzolato, 26, of Tickfaw, Louisiana, was charged December 2, 2009 by a federal grand jury sitting in New Orleans in a 64-count indictment for operating an investment “Ponzi” Scheme, announced U.S. Attorney Jim Letten.

Specifically, Pizzolato was charged with 52 counts of mail fraud ( counts 1-52 ), two counts of wire fraud ( counts 53, 54 ), seven counts of money laundering ( counts 55-61 ), one count of securities fraud ( count 62 ), one count of witness tampering ( count 63 ), and one count of obstruction of justice ( count 64 ) in violation of federal law.

According to today’s indictment, since 2005, MATTHEW B. PIZZOLATO, was affiliated with and/or operated and/or owned Gulf Region Guaranty, Inc. ( Gulf Region Guaranty ) and its affiliated companies Acadian Guaranty Group, LLC; Allegiance Financial, LLC; Annuity Presets, LLC; Annuity Recovery Services, LLC; Anova Marketing Systems, LLC; Anova Marketing Systems, LLC; Anytime Fitness of Sulphur, LLC; Cornerstone Wealth Management, LLC; Global Assured Financial, Inc.; Green Pelican Group, Inc.; Gulf South Guaranty, Inc.; Gulf States Guaranty, LLC; GRG Holdings, LLC; GRG I, LLC; GRG II, LLC; Matt P, LLC; National Insurance Advisors, LLC; Pelican Guaranty Group, Inc. ( Pelican Guaranty ); and Spectrum Lending Group, LLC. PIZZOLATO maintained offices in Hammond, Covington, Lake Charles, Baton Rouge, and also conducted business in the New Orleans metropolitan area.

Pizzolato is charged with having purchased hundreds of thousands of dollars worth of luxury cars using investor money including a BMW 750LI, a Mercedes Benz S430V, a Range Rover Sport, and a Chevrolet Corvette. Additionally, the indictment charges that Pizzolato used investor money to build a new half-million dollar home in Ponchatoula, Louisiana and to purchase a $35,000.00 engagement ring.

According to the indictment, during the time period of 2005 through the date of the indictment, Pizzolato, obtained approximately $19.5 Million from approximately 160 investors and spent nearly all of the money.

Seniors and Retirees were prime targets

According to the allegations, during this time period, Pizzolato operated an investment “Ponzi” scheme targeting older investors, specifically retirees. Pizzolato lured his potential victims through advertisements in the local daily newspapers in New Orleans, Baton Rouge and Hammond by promising rates of returns that were higher than market rates for CDs or U.S. Treasury Bills.

FBI Special Agent in Charge David Welker stated: “It is unconscionable that in this stressful economy senior citizens would be targeted and defrauded of their life savings. We have an obligation to aggressively investigate crimes against those citizens who are most vulnerable. The FBI and our law enforcement partners will continue to aggressively pursue those who target our most vulnerable citizens.”

If convicted, Pizzolato faces up to twenty ( 20 ) years imprisonment for each count of mail fraud, wire fraud, securities fraud, and witness tampering; and up to ten ( 10 ) years imprisonment for each of the money laundering and obstruction of justice charges. He also faces fines of up to $16 million and five (5) years of supervised release after he is released from prison.

In May of this year, the Mississippi Department of Banking and Consumer Finance notified all of the state’s mortgage license holders that, as of July 1, 2008, the state will be participating in the National Mortgage Licensing System (NMLS) and that participation for all of the state’s mortgage license holders is mandatory.

NMLS officially launched on January 2, 2008, and was the culmination of a four-year effort by state regulators and is just one part of a multi-faceted plan being implemented to enhance consumer protection, improve regulation, increase uniformity of mortgage supervision, and streamline the licensing process. These efforts include coordinated supervision, improved regulatory practices, and consistent standards for testing and training for mortgage originators; and uniform license application, renewals and annual reports. To accomplish this, Mississippi’s Department of Banking and Consumer Finance amended the Mississippi Mortgage Consumer Protection Law during the past regular session of the Legislature to mandate participation in NMLS.

At its core, NMLS is a state-based approach that has the benefits of localized accountability and an on-the-ground regulatory system combined with the efficiencies of a nationwide framework. This type of framework has the potential to create high and consistent regulatory standards without preempting states important role in the development of consumer protections and the enforcement of lending standards.

NMLS’ basic feature is a central database, containing a single record for every state-licensed mortgage lender,
broker, and branch and loan originator, based on the uniform mortgage application forms developed by state
regulatory agencies. It will also drive standardization and coordination among state regulators in areas such as
licensing requirements, background checks, testing and education, enforcement action, examinations and annual
reporting, which is bound to have a positive impact in the fight against real estate and mortgage fraud.

To date, 42 state agencies representing mortgage regulators in 40 states have indicated their intent to be a part of
NMLS. By the end of 2008 there should be 19 state agencies on the system with another 14 participating in 2009.
The remainder of the 42 agencies are expected to come online in 2010 and 2011. Total projected enrollment in NMLS will be more than 500,000 professional licensees. In Mississippi, the Department of Banking and Consumer Finance estimates its enrollment will be approximately 4,000 mortgage professionals.

The Connecticut Department of Banking and the Louisiana Office of Financial Institutions have issued announcements indicating their participation on NMLS starting July 1, 2008, also. Connecticut licensees have until September 30, 2008 and Louisiana licensees have until October 1, 2008 to transition their license(s) onto NMLS. Both agencies will begin accepting submissions through NMLS on July 1.