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KNOXVILLE, TN - February 18, 2011 - (RealEstateRama) -- A federal grand jury has returned a superseding indictment against Jerry Kerley, 57, of Kodak, Tenn., and Jeffrey Whaley, 46, of Sevierville, Tenn.. The superseding indictment, which was returned this morning, charges Kerley and Whaley with conspiring to defraud Citizens Bank, located in New Tazewell, Tenn., and SunTrust Mortgage, Inc., located in Richmond, Va., through a mortgage fraud scheme. The indictment alleges that the conspiracy involved a "straw borrower" mortgage fraud scheme in which straw borrowers were induced to obtain mortgage loans in their names based on promises that they would not have to make a down payment or mortgage payments for the property, would receive cash at closing, and would share in the profit following a resale of the property.