David Saks: CLOSING ATTORNEY GUILTY OF MULTI-MILLION DOLLAR MORTGAGE FRAUD

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

CLOSING ATTORNEY GUILTY OF MULTI-MILLION DOLLAR MORTGAGE FRAUD

Connecticut Attorney Admits Participating in $10 Million Mortgage Fraud Scheme

U.S. Attorney’s Office July 12, 2012
  • District of Connecticut (203) 821-3700
 
 

NEW HAVEN, CT—Bradford J. Rieger, 56, of Woodbridge, Connecticut, waived his right to indictment and pleaded guilty today before U.S. District Judge Janet C. Hall in Bridgeport, Connecticut, to one count of conspiracy to commit mail fraud, wire fraud, and bank fraud, announced David B. Fein, U.S. Attorney for the District of Connecticut. The charge stems from Rieger’s role as a closing attorney in a multi-million-dollar mortgage fraud scheme in New Haven.

According to court documents filed in this case and related cases, between approximately 2006 and 2008, Rieger, who had offices in East Haven, Connecticut, along with Ronald E. Hutchison, Menachem Levitin, and others, conspired to defraud mortgage lenders and financial institutions by obtaining millions of dollars in fraudulent mortgages for the purchase of dozens of multi-family properties in New Haven. As part of the scheme, sellers of the properties agreed to accept sale prices that were significantly lower than the contract prices. The lower prices were not disclosed to lenders from which the buyers obtained financing to purchase the properties. Those involved in the scheme submitted to mortgage lenders false HUD-1 forms that often did not match another, undisclosed HUD-1 form that was actually used to disburse the fraudulently obtained proceeds at the closing. As a result of the submission of the false HUD-1 forms and other false documentation in support of the loans, including falsified monthly rental income and fictitious leases, the mortgage lenders would issue mortgages based on the inflated sales price.

Scheme participants used the fraudulently obtained mortgage proceeds to pay themselves and others.

In most of the fraudulent transactions, the buyers did not make any deposits or down payments for the properties they purchased. Rather, the co-conspirators used some of the fraudulently obtained mortgage proceeds to cover the down payments and deposits. In addition, at or shortly after a closing, a borrower would often receive several thousand dollars, although this payment was not disclosed to the lender.

Rieger acted as a closing attorney in approximately 19 fraudulent transactions. In connection with many of these closings, Rieger prepared false HUD-1 forms that were submitted to lenders. In some of these transactions, while the HUD-1 form that Rieger sent to the lender indicated that the borrower brought funds to the closing, Rieger actually distributed funds to the borrower.

In total, more than $10 million in fraudulent mortgages on more than 40 properties were obtained during the conspiracy. Many of the houses purchased during the scheme went into default and have been foreclosed upon, causing losses of more than $7 million to lenders.

Judge Hall has scheduled sentencing for October 4, 2012, at which time Rieger faces a maximum term of 30 years in prison and a maximum fine of approximately $20 million. As part of his plea agreement, Rieger agreed to pay at least $2.2 million in restitution.

Hutchison and Levitin also have pleaded guilty and await sentencing.

This case is being investigated by the FBI, the U.S. Postal Inspection Service, the U.S. Department of Housing and Urban Development-Office of Inspector General (HUD-OIG), and the Federal Housing Finance Agency-Office of Inspector General. The criminal case is being prosecuted by Assistant U.S. Attorney David T. Huang, and the parallel civil forfeiture cases are being handled by Assistant U.S. Attorney Julie G. Turbert.

In July 2009, the U.S. Attorney’s Office for the District of Connecticut and the FBI announced the formation of the Connecticut Mortgage Fraud Task Force to investigate and prosecute mortgage fraud cases and related financial crimes occurring in Connecticut. Citizens are encouraged to report any suspected mortgage fraud activity by calling 203-333-3512 and requesting the Connecticut Mortgage Fraud Task Force or by sending an e-mail to ctmortgagefraud@ic.fbi.gov.

The Connecticut Mortgage Fraud Task Force includes representatives from the U.S. Attorney’s Office; FBI; Internal Revenue Service-Criminal Investigation; U.S. Postal Inspection Service; HUD-OIG; Federal Deposit Insurance Corporation, Office of Inspector General; and the State of Connecticut Department of Banking.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. The task force has established financial fraud coordinators in every U.S. attorney’s office around the country to help make these broad mandates a reality on the ground. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations.

Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

source: FBI



David Saks



Time&Temp Memphis

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Comment balloon 0 commentsDavid Saks • July 13 2012 09:20AM

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