Jerry Kerley gets four years in fraud scheme

Sevierville attorney also will serve probation, make restitution
Jun. 07, 2013 @ 11:59 PM

A federal judge sentenced Sevierville attorney Jerry Kerley to four years in prison and another three on probation Thursday for his part in a mortgage fraud scheme.

A jury convicted Kerley and developer Jeff Whaley last May on charges of wire fraud, conspiracy to commit wire fraud and money laundering. He remained free Thursday pending a possible appeal of the sentence.

Authorities said they defrauded banks by lining up “straw buyers” to obtain mortgage loans under false pretenses, using other funds to make down payments. Kerley, who owned Guaranty Land Title, was accused of overseeing the transactions when he should have stopped them.

Kerley claimed that was the extent of his involvement, but Judge Thomas Phillips indicated he agreed with prosecutors and the jury in finding that Kerley played a more active role in the scam. “The defendant played an integral part in the crime,” Phillips said.

However, Phillips had approved a defense motion that called for him to consider a briefer than normal sentence for the crime.

Whaley’s sentencing is set for July 1.

Kerley will serve the four years at a minimum security prison. He is expected to help pay restitution on $1.9 million.

Whaley, as a codefendant, is also required to make restitution, along with two others involved with the scheme: Mary Bevins pleaded guilty to wire fraud and was placed on probation; Kenneth Lee pleaded guilty to wire fraud and money laundering and was also placed on probation.

Kerley has maintained he had minimal involvement in the scheme, and that the only money he made on the transactions was $27,000 in fees he collected through his title company. The state has suspended his license to practice law.

The gallery of the federal court room was again lined with his supporters, and Phillips noted he had received more than 100 letters asking him to be lenient in sentencing Kerley.

jfarrell@themountainpress.com