Manhattan U.S. Attorney Preet Bharara has announced charges against 14 defendants in a $58 million mortgage fraud scheme involving Long Island-based mortgage broker First Class Equities.
Bharara’s office filed a five-count indictment against Gerard Canino, the owner and president of First Class, five of the company’s loan officers, four attorneys with links to the company and one disbarred lawyer, all for their part in a mortgage fraud scheme involving 100 home mortgage loans.
“This brazen and wide-ranging scheme defrauded banks and lenders of millions and enriched its participants, including real estate professionals who took advantage of their inside knowledge of the system to fleece it,” Bharara said.
According to court filings, First Class Equities conspirators arranged home sales between “straw buyers” — people who had no genuine interest in buying the property. In one case, a defendant was paid $300,000 to act as a straw buyer to obtain 10 separate mortgages in 2006. First Class Equities loan officers then obtained mortgage loans for the sham deals by submitting fraudulent applications.
In addition to their roles in the scheme, two of the 14 defendants are also charged with making false statements to the FBI write out fbi in first reference.
“Their purpose wasn’t to assist homebuyers,” Janice Fedarcyk, FBI assistant director-in-charge, said in a statement. “It was a thinly-veiled multimillion-dollar bank fraud scheme.” — Katherine Clarke