But their attorneys say the state indictment fails to tell the entire story.
"This is the final fallout of the real estate bust or scandal that gripped the country," said Mark Fury, a Mount Holly lawyer who represents McGhee, a 72-year-old widow from Willingboro. "Her husband died and she's in financial trouble, and someone introduced her to this mortgage guy. I don't know how the state can show she conspired with him."
William Barksdale, who owned investment, business, and mortgage counseling businesses, is awaiting sentencing next month before U.S. District Judge Robert Kugler in Camden, and faces up to 30 years in prison and $1 million in fines. He admitted to a charge of wire fraud that was tied to a scheme in which he says he assisted families in the Willingboro, Burlington, and Pemberton areas to fraudulently apply for millions in loans between April 2007 and May 2010.
Fury said that mortgage brokers were originating as many loans as they could during the real estate bust and victimized clients who needed money. His client, he said, had lost her husband two years earlier and was snared by Barksdale, who "offered a solution to her" to pay her bills.
When Barksdale pleaded guilty, Fury said, he also agreed to cooperate with investigators and named Fryar "because he's famous," and also named his mother.
McGhee "was attempting to refinance her house" and went to Barksdale for assistance, Fury said. "The state will not be able to prove she knowingly submitted five applications to defraud the banks. Once the brokers get involved, you don't know what happens to your signature," he said, referring to mortgage schemes that occurred after the real estate collapse.
Michael Gilberti, a Little Silver, N.J., attorney who represents Fryar, said that the state is claiming his client is a coconspirator with Barksdale and his mother, but Fryar "never took any money." Gilberti said Fryar and McGhee "were victims of this thing," contending Barksdale devised a scheme to manipulate the banks into providing loans they normally would not approve.
Robert Agre, a Cherry Hill lawyer who represents Barksdale, dismissed the remarks, saying, "Mr. Barksdale has accepted responsibility for acts which led to federal charges" but is "unwilling to accept responsibility for actions in which others engaged of their own volition."
McGhee and Fryar, 51, who lives in Springfield Township, Burlington County, entered not-guilty pleas through their attorneys when they appeared in court in Mount Holly. Superior Court Judge James Palmer Jr. released McGhee without requiring her to post bail and released Fryar on $20,000 bail.
Fryar, a former Pro Bowl athlete and wide receiver who also played for the NFL's New England Patriots, Miami Dolphins, and Washington Redskins, was fired from his job as head coach of the Robbinsville High School varsity football team in Mercer County after he was indicted in October.
He still preaches on Sundays, and eight congregation members attended his arraignment to show their support, his lawyer said. "He had put money into the church from his own money," Gilberti said.
Peter Aseltine, spokesman for the attorney general, said Wednesday that he would not comment on the defense lawyers remarks except to say that "they clearly are not consistent with the facts in this case."
The indictment says McGhee applied for five home equity loans between Dec. 16 and 21, 2009, using her Willingboro home as collateral, and fraudulently claimed she earned "thousands of dollars each month as an event coordinator for Fryar's church." She and Fryar conspired to deceive the banks, the state alleges, by quickly closing on each of the loans without disclosing the others and before the loans could be recorded. This caused each bank to believe that it held the first lien on the house and that it would be covered by any default.
Four of the banks received only "a few payments" and later "wrote the loans off as losses," according to the attorney general.
The five banks that were defrauded are Susquehanna Bank, The Bank, Cornerstone Bank, Sun Bank, and Beneficial Bank, the indictment says.
The offenses are second-degree crimes that carry five to 10 years in prison and fines up to $150,000. Fury said McGhee was offered a plea deal of three years in prison, which Fury called "ridiculous" and rejected. Gilberti said the state offered a deal to Fryar in which he would plead guilty to one count and face up to five years in prison, but that was also rejected.