Clay McCormack


UPDATE: Former Jackson Attorney Accused of Fraud

Heather Mathis

JACKSON, Tenn. - A Jackson man is now facing federal fraud charges.

Clay McCormack, 49, was indicted Monday on two counts of bank fraud and two counts of false statements.

According to a news release, the indictment alleges that as early as October 2007, McCormack entered into a criminal conspiracy with James Lee Bishop, a local real estate investor, who was not indicted Monday. Bishop would recruit individuals or limited liability companies to purchase real property for the purpose of investment.

While acting as the closing attorney for Teel, McCormack and Maroney, a law firm in Jackson, McCormack is accused of creating HUD-1 reporting documentation which indicated that certain lenders were paid off via check as a result of the closing. He would then void those checks, or have others void the checks, within days and reissue the checks to Bishop.

This money was then used by Bishop to provide the funds at closing on behalf of the borrowers; and the paperwork would fraudulently reflect that the funds had actually been provided by the borrowers. McCormack would provide a letter to the new lender indicating that they were in first lien position on the property.

Counts one and two of the indictment allege that McCormack’s scheme defrauded Community Bank, 3200 North Highland Ave, Jackson, TN and FirstSouth Bank, 1862 Hwy. 45 Bypass, Jackson, TN. Counts three and four allege that he created false documentation and submitted it to the banks in furtherance of his crime.

McCormack faces up to 30 years in prison and a $1 million fine for each of the two bank fraud counts; and up to five years in prison and a $250,000 fine for each of the two counts of making false statements. The government is also seeking a criminal forfeiture money judgment of $3,832,366.88, representing the amount involved in the two bank fraud charges.

WBBJ 7 Eyewitness News reached out to several people who said they were defrauded by the alleged scheme and ended up having more debt on properties because of the scheme. None wanted to speak on camera and many indicated they were in the process of legal proceeds against McCormack.

If you would like to read a statement from Teel & Maroney P.L.C. go to our "Seen on 7" section of


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