On CandysDirt,  I told you about Al and Erin Hill, that’s Al Three, who recently moved their family to Atlanta. They bought a $9 million dollar estate in swanky Buckhead (think Highland Park on Strait Lane in Dallas), closed on it in July. Last spring, the couple had some legal problems involving a $200,000 HELOC — home equity — loan on their Highland Park home. A Dallas grand jury made some serious charges: three counts of making a false statement to obtain property or credit and one count of securing execution of a document by deception against the 40-year-old Hunt oil heir. Erin Hill, age 38, was charged with two counts of making a false statement and one of securing execution of a document by deception. The indictments centered on $200,000 (really, a drop in the bucket) from OmniAmerican Bank taken out in 2009 when they claimed to be sole owners of their $1.9 million Highland Park home: majority interest in the Highland Park home is owned by the Albert Hill Trust, the young couple only owns about 20%. There were some charges too about false statements and “securing execution of a document by deception.”  At the time, Al Three did not have legal representation.

Here’s what my sources tell me: Al Three recently fought to change the trustee of his trust, and he likely convinced the trustee to buy the $9 million Atlanta estate on his behalf. (Taxes on that spread are a mere $50,000 a year — what is Georgia doing right about real estate taxes that Texas is doing wrong?) Sources tell me his legal fees in Dallas have eclipsed $70mm, and certain very generous Dallas friends are chipping in to cover those.

4433 Bordeaux, Dallas

This is a very sad story for the family, and I hate to even have to report it. (If I don’t, someone else will.) My heart goes out to them and I truly hope they can find peace with each other someday — life is really too short. Careful readers will recall when I told you the Hills dismissed their Dallas household staff in July, paid them in full, and handed out letters of recommendation. Some of the staff has complained that when prospective employers contacted the Hills for references, as promised, they got nada. Seems like they are really trying to cut all ties with Dallas.

Now I wonder if the next purchase is a second home down in Destin?

This is why it probably pays to subscribe to the Dallas Morning News, who is reporting that Al G. Hill III, descendant of legendary oilman H.L. Hunt, and his wife, Erin Nance Hill, were indicted last week on several felony counts of mortgage fraud.

A grand jury returned three counts of making a false statement to obtain property or credit and one count of securing execution of a document by deception against Al,  age 40. His wife, Erin, age 38, was also charged with two counts of making a false statement and one of securing execution of a document by deception.

This centers on the Hills obtaining a loan for more than $200,000 from OmniAmerican Bank in 2009 by claiming to be sole owners of their Highland Park home, falsifying his income and her assets. Al, for example, claimed a monthly income of $54,341 while Erin claimed to have more than $100,000 in a bank account.

According to the Dallas Central Appraisal District website, the couple owns only 20 percent of their $1.9 million home on Bordeaux. The majority interest is owned by the Albert Hill Trust, whose beneficiary is Al III’s father, Al Hill Jr. And of course father and son have been embroiled in a long, sad, bitter civil suit for several years over the estate, Al III claiming mismanagement and wanting more millions. A confidential source tells me the Hills have pared down their lifestyle somewhat: whereas Erin used to have a nanny for each child and a cook, there is now a house manager who also tends the children, two housekeepers and gardeners. There was a settlement last spring, but last week, Al III filed an appeal in federal court, which the News apparently found.

Mortgage fraud ain’t no laughing manner — you don’t lie or fib on loan applications. The charges are first-degree felonies, with a punishment range of probation or five years to life in the penitentiary.

It is time to dig out an interview I did with Al, Jr. last spring after the settlement. This story is developing.