|By Pedro Ruz Gutierrez, South Florida
Knight Ridder/Tribune Business News
May 20, 2006 - A federal judge Friday sentenced two South Florida investors to three and five years in prison, respectively, for their roles in a $67 million loan scheme to finance hotels by defrauding lenders.
U.S. District Court Judge Anne Conway gave Terry Singh Mughar, 47, a five-year prison term and ordered the Miami-Dade resident to repay nearly $40 million in restitution to JP Morgan Chase. Conway sentenced Jason Madow, 36, of Boca Raton to 31/2 years in prison and ordered him to repay JP Morgan Chase $34.7 million.
In addition, Conway ordered both men to do 150 hours of community work while they serve three-year probations after their release from prison.
"I'm very sorry for my actions," Mughar told Conway. "I apologize."
Madow earlier expressed regret for his actions and cooperated with federal agents from the start of the investigation. His cooperation led to Mughar's guilty plea in the case, according to court records, and ultimately resulted in his reduced sentence Friday.
Both men reached agreements in February with the U.S. Attorney's Office in Orlando and pleaded guilty to one count of conspiracy to commit wire fraud.
From 1999 to 2001, Mughar inflated the price and value of hotels through fraudulent appraisals based on false hotel income and occupancy rates. Mughar and Madow used those reports, along with fake promissory notes, bogus income-tax statements and official-looking bank checks, to secure the loans
Two of the hotels, formerly known as La Suite Hotel and Orlando Grand Resort, are on International Drive and now operate under different names and ownership. Other properties include a former Travelodge in Fort Lauderdale and two hotels each in West Palm Beach and Miami-Dade.
Conway ordered the men to make $100 monthly payments once they are released from prison, but it's unclear how or whether the pair will be able to repay the millions they owe JP Morgan Chase.
Pedro Ruz Gutierrez can be reached at firstname.lastname@example.org or 407-420-5620.
Copyright (c) 2006, South Florida Sun-Sentinel
Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail email@example.com. NYSE:JPM,