Ex-mortgage broker sentenced to prison

A former Phoenix mortgage broker was sentenced to 42 months in federal prison for bilking four senior citizens out of more than $400,000 in a residential mortgage loan operation scam.

Rick Thomas McCullough, 36, also will receive seven years probation and was ordered to pay $343,811 in restitution after he pleaded on Friday to one count of securities fraud and one count of fraudulent schemes and artifaces, the Arizona Attorney General’s Office announced on Monday.

While working as the president of CactusCash in 2005 and 2006, McCullough used his position to persuade four seniors to refinance their homes through him for amounts far greater than the balance of their existing mortgages, according to the attorney general’s office.

McCullough convinced the victims to invest their net refinancing proceeds with him, effectively obtaining for himself much of the equity the clients had in their homes. He claimed he would invest the money in real estate and personally guaranteed the loans despite lacking the assets to do so. McCullough then used the money to make personal purchases, including a $42,000 ring for his wife.

McCullough also has been barred from working in any financial institution in the future, the attorney general’s office said.