The Real Deal New York

Buy-A-Home owner pleads guilty in fraud case

December 28, 2012 02:00PM

Mitchell Cohen, the owner of the now-shuttered Buy-A-Home real estate brokerage in Queens, has peaded guilty to one count of conspiracy to commit wire, bank and mail fraud linked to a multimillion-dollar fraudulent mortgage scheme, Preet Bharara, U.S. Attorney for the Southern District of New York, announced today. StopFraud, the government’s financial fraud enforcement task force, said that Cohen is scheduled to be sentenced in April.

“Mitchell Cohen was a tornado of mortgage fraud, and he left a trail of destruction in his wake – borrowers who could ill-afford the homes he pushed them to buy, banks that were saddled with the bad loans, and taxpayers whose tax dollars paid the insurance claims that had to be paid when borrowers defaulted. Cohen also thumbed his nose at the legal process by defying a judge’s order and then lying about it under oath. With his plea today, Cohen is owning up to his crimes,” Bharara said.

Among the charges, Cohen faced allegations of buying, or promising sellers that he would purchase, homes at one price, but then lure buyers into closing on the properties for inflated prices — often $100,000 above what he had paid. He also was charged with having his employees pay off his clients’ debt by funneling money through bank accounts belonging to relatives of the borrowers. This way, according to the charges, it would look like the debts had been paid by appropriate sources and would make the borrowers seem creditworthy.

Cohen also pleaded guilty to a count of perjury for statements made in a 2010 civil fraud case filed against him by his office. [StopFraud]Zachary Kussin