It’s hard to trace when or where Scott M. Wickersham crossed over into the seamy world of bank fraud. But a May 2005 deal involving an unremarkable Summerville office building provides an interesting point of reference.

Wickersham is the former loan officer and would-be real estate entrepreneur accused of obtaining about $45 million in mortgages and pocketing outsized commissions largely through the use of manipulated financial documents and inflated property appraisals.

The U.S. attorney’s office in Charleston has ballparked the losses from the brazen but failed property-flipping scheme at more than $20 million, according to a court document filed Aug. 17.

Wickersham, 33, already has signed a deal to plead guilt and relinquish assets, according to the agreemment. He also is cooperating with investigators, suggesting more heads could roll. He is scheduled to be arraigned in federal court this week.

The criminal case the government has built against him identifies 86 real estate sales between April 2006 and November 2007, mostly condominiums and lots in coastal South Carolina and Georgia. Nineteen transactions were in the Charleston region.

1940 Trolley

Not on the government’s list for unknown reasons is the May 2005 deal, which was struck at a time when the local real estate market was still rocking and rolling.

Wickersham’s New Freedom Enterprises LLC took title early that month to an office property at 1940 Trolley Road in Summerville from a firm controlled by one of his then-business partners, according to a civil lawsuit filed in Charleston County. The stated sale price: $10.

Financial shenanigans soon followed.

A few weeks later, Wickersham obtained a nearly $1.2 million mortgage from the Grand Strand’s Beach First National Bank to buy property on North Ocean Boulevard in Myrtle Beach. He had to put up the Summerville office as extra collateral, court documents show.

Fast forward about 18 months to Oct. 5, 2006, when First Federal of Charleston approved a $590,000 loan to refinance 1940 Trolley. The money changed hands a few weeks later. And once again, the Summerville building was used as collateral, which would have been fine if the lender knew it was taking a second mortgage behind Beach First.

Problem was, it didn’t. First Federal said in court filings it never would’ve approved the refinancing if it knew another lender had first dibs on 1940 Trolley in the event of a default.

Common thread

This wasn’t a clerical oversight on the part of First Federal. The bank believes it was intentionally kept in the dark, noting that the Beach First loan wasn’t recorded with Dorchester County until a year and a half later, and on the same day First Federal committed to making its loan.

As a result, the Charleston bank said it was “prevented from searching the public records and discovering that there were other liens” on the Summerville property.

According to court records, a common thread in both transactions was a female law firm employee who purportedly was a friend of Wickersham’s. The woman also recorded both mortgages, according to First Federal’s lawsuit and a separate but related complaint. She has not been charged and could not be reached for comment last week.

First Federal, which ended up losing its collateral, said the Wickersham episode cost the bank and its shareholders about $567,000.

Beach First fared worse. It failed in April 2010 under a raft of bad real estate loans.

As for 1940 Trolley, New Freedom Enterprises defaulted on both of the mortgages it took out against the property after the real estate market began to falter. The company lost the title to the building in a foreclosure lawsuit.

But in the interim, 1940 Trolley played a supporting role in the scheme that’s only now coming to light. It was the home office to North American Mortgage Group LLC, where Wickersham was a loan officer, and Realty Executives of Coastal Carolina, which he partly owned. His attorney declined to comment last week.

Prosecutors say both businesses were involved in and, in many cases, profited from the 86 property sales.

Contact John McDermott at 937-5572.