2 Attorneys Among 13 Charged in Claimed N.Y. Mortgage Fraud
Two New York lawyers who allegedly helped close fraudulent mortgage transactions as part of a multi-pronged scheme run out of a Long Island mortgage brokerage are among 13 individuals charged with bank and wire fraud in a federal grand jury indictment in Manhattan.
Stephen Caputo, 54, of East Setauket, N.Y., and Dawn Hughes, 37, of Lindenhurst, New York, are accused of participating, as real estate attorneys, in a scheme in which New York City-area residential properties were purchased from struggling homeowners as part of fraudulent mortgage rescue and resale programs.
Using falsified application information, participants allegedly obtained between 2005 and 2007 some $10 million in mortgages that otherwise would not have been granted for properties that quickly went into foreclosure as the defendants and/or straw buyers they recruited failed to make payments on the loans, according to a press release (PDF) from the U.S. Attorney’s Office for the Southern District of New York.
Acting as buyer’s counsel, seller’s counsel and/or settlement counsel, the two lawyers “knowingly assisted in closing fraudulent mortgage loans and making payments that were not disclosed to the lenders, in furtherance of the fraudulent scheme,” the release states. Among the misrepresentations allegedly made were that buyers intended to occupy the homes they were purchasing and that inflated income claims.
A copy of the indictment (PDF) is provided by the Mortgage Fraud Reporter.
