5 Lawyers Indicted for Mortgage Fraud Scheme
Federal prosecutors have charged five lawyers with running a mortgage loan
scheme that was siphoning money from over 100 mortgage loans on homes based in the New York
The scheme ran from 2004-2009 and used the mortgage company First Class Equities to falsify deals between distressed homeowners and fake prospective buyers (who would never actually pay for, or live in, the home) then received loan proceeds from banks and submitted falsified paperwork as to how the money was being distributed. Instead, the money was being handed out to co-conspirators out the back door.
In many cases fake W-2’s and pay stubs were created to support the loan application.
The indictment claims that one defendant was paid $300,000 to pose as a buyer and obtain 10 different home loans in 2006.
One of the lawyers charged had previously been disbarred and pleaded guilty to practicing law without a license in 2009. Five of the conspirators were former loan officers.
The ringleader, Gerard Canino, was the owner and CEO of two Long Island mortgage brokers, First Class Equities and TAT Mutual Capital. The FBI claims Canino used his companies as fronts to cover massive amounts of mortgage fraud.
According to the U.S. Attorney General
, most of the homes are now in serious default or foreclosure as a result of the fraud.
A total of 14 people were charged in the case. The group managed to make away with a total of $58 million.
The defendants were charged with bank fraud, conspiracy to commit bank and wire fraud, and falsifying documents. Several charges can carry a maximum of 30 years in jail.
On Tuesday, the U.S. Attorney General handed out four separate indictments charging 27 people in South Florida in a range of mortgage and bank fraud schemes.