A 45-year-old Newtown Square man with a taste for luxury has been indicted by a federal grand jury in Philadelphia for defrauding banks and homeowners out of $13 million in a series of mortgage-finance schemes to pay for his lavish lifestyle.

George Barnard was charged with 24 counts of wire fraud, four counts of bank fraud, and three counts of filing a false tax return.

The indictment charges that Barnard, one of two owners of Capital Financial Mortgage Corp., from 2005 through 2013 refinanced mortgages for clients, but instead of using the money to pay off existing loans and fund new mortgages, kept it for himself.

As a result, dozens of homeowners were stuck paying two mortgages, the new, "refinanced" loans on their houses and the old mortgages, which were never paid off, the indictment said.

Barnard used the money to purchase yachts, luxury cars, and multimillion-dollar beach homes in Avalon, while also paying the salary of a yacht captain, the indictment alleges.

Barnard and David Fili Jr., the other co-owner of Capital Financial, had earlier become embroiled in lawsuits alleging that Capital Financial had misappropriated their money and engaged in a Ponzi scheme. Capital Financial had offices in Somerdale, Camden County, and Folsom, Delaware County.

Fili was indicted by a federal grand jury last year, charging that he had plundered loan escrow accounts to pay for a vacation home and "extensive casino and sports gambling."

Attempts to reach Barnard on Saturday were unsuccessful, but in an interview with the Inquirer in 2013, he denied any wrongdoing.

In June 2013, after complaints from homeowners, the Pennsylvania Department of Banking and Securities revoked Fili's mortgage license, concluding he caused Capital Financial to become insolvent by engaging in "negligent, dishonest, fraudulent, illegal, unfair, and/or unethical business practices."

The company, which began having cash-flow problems in 2010, according to court documents, has since become insolvent and no longer exists.

According to the indictment, Barnard wrote a series of mortgages that he represented to banks purchasing them as first mortgage loans, when in fact they were worthless second mortgages.

During this period, Barnard falsely reported to the IRS that he had sustained hundreds of thousands of dollars in losses when he actually had $2.3 million in unreported income, the indictment alleges. At the same time, he allegedly furnished banks with inflated income statements to further his loan schemes. He also allegedly inflated the purchase price of one of his homes, from $2 million to $3 million, in fraudulent closing documents prepared by a title company he owned and furnished to a bank.

Authorities allege that 25 defrauded homeowners were stuck with mortgages on their homes that they thought had been paid off, when instead the money went into Barnard's pocket.

If convicted, Barnard faces a maximum sentence of 669 years in prison, although sentencing guidelines likely would result in a lesser prison term, from 11 to 14 years of confinement, authorities said. In addition, Barnard faces five years of supervised release and a $12.3 million fine.

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