The former owners of Virginia Beach-based Landbank Equity Corp. were sentenced in federal court yesterday to more than 30 years in prison and fined a half-million dollars each for swindling several savings and loan associations and other investor businesses in the secondary mortgage market.
U.S. District Judge J. Calvitt Clarke Jr. in Norfolk, rejecting the defense attorneys' contention that federal prosecutors had been overzealous in the case, sentenced William R. Runnells Jr. to 40 years in prison and his wife, Marika Lody Runnells, to 31 years in prison.
Clarke also ordered that the Runnellses pay the government a total of $1 million for restitution to the various borrowers and investor groups that fell prey to the Landbank conspiracy. Prosecutors claimed that Landbank was responsible for more than $50 million in losses to federally insured institutions that invested with it.
Attorney General Richard B. Thornburgh, who has made the prosecution of white-collar crime an increasing priority, praised the sentences, saying that "white-collar criminals, especially those responsible for the collapse of our financial institutions, are now counting their jail time in decades."
William Runnells, 49, and Marika Runnells, 48, were found guilty last November of 87 and 59 felonies, respectively, including conspiracy, racketeering, tax fraud and obstruction of justice.
The sentencing brought to a close a three-year investigation into Landbank. The firm, which was formed in 1980, sold more than 10,000 mortgages to 40 institutions and operated 30 offices in five states before filing for bankruptcy protection in 1985.
The Runnellses, who eluded authorities for two years before being captured in Dallas early last year, built their fraudulent empire on individual borrowers who were desperate for loans and agreed to exorbitant lending fees. Landbank then sold portfolios of bad loans to investor institutions, including several savings and loans.